Sequential liabiltiy

 

Updated: November 1, 2016

Applies To: Dynamics Marketing

System_CAPS_importantImportant

Microsoft Dynamics Marketing is scheduled to be retired on May 15, 2018. After that date the service will no longer be available. Please plan accordingly. For details, see the blog post Microsoft Dynamics Marketing service will be discontinued, and learn what’s coming next.

Sequential Liability is a rule stating that a company only has to pay money it owes after it has received payment from its customers. Agencies commonly use sequential liability when it comes to media buying for clients. This design enhances our ability to process sequential liability. In fact, since 1991, the American Association of Advertising Agencies has maintained that advertisers and their agencies are "sequentially liable" for media payments. Under "sequential liability," a media outlet could look to the agency for payment if the agency had been paid by the advertiser, but would be limited to seeking payment directly from the advertiser if the agency had not yet been paid. Prior to payment to the agency, the advertiser shall be solely liable.

Microsoft Dynamics Marketing provides features to help manage sequential liability: the Payment in Full Indicator (PIF)  and the Invoice Payment Total on the Accounts Payable dashboard provide an excellent way to determine whether the Client Invoice for a Media Expense has been paid.

Microsoft Dynamics Marketing's PIF function is designed to support the following sequences of transactions:

  1. Media Order > Media Expense > Invoice > Client Payment - The PIF indicator is displayed on the Accounts Payable dashboard.

  2. Media Order > Media Invoice > Client Payment > Media Expense from Order - The PIF indicator is displayed on the Accounts Payable dashboard.

  3. Media Order > Media Invoice > Client Payment > Expense Reconciliation > Media Expense -The PIF indicator is displayed on the Accounts Payable dashboard.

  4. Order Details > Media Invoice > Client Payment > Media Order > Media Expense - The PIF indicator is displayed on the Accounts Payable dashboard.

  1. Media Plan Item > Media Order > Media Expense > Media Plan Item > Invoice - The PIF indicator is displayed on the Accounts Payable dashboard.

  2. Media Plan Item > Media Invoice > Client Payment > Media Plan Item > Order > Media Expense - The PIF indicator is displayed on the Accounts Payable dashboard.

Merged invoices - The PIF function also supports merged invoices.

While the PIF indicator shows whether invoices are paid in full or not, it doesn't indicate if all the advertisements have been invoiced. The Invoice Payment Total is provided to address this issue. Under normal circumstances, the Invoice Payment Total should exceed the Total of the Expense (unless the price of the ads is less than the cost.)

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