Instalment Sales Workflow

The Instalment Sales Workflow handles sales where customers use third-party financing providers like AEON, JCL, or other buy-now-pay-later services. The company receives full payment from the financier while customers pay in instalments to the finance company.

Workflow Overview

Customer Selection → Financing Application → Credit Approval →
Sales Order Creation → Agreement Signing → Delivery Scheduling →
Agreement Submission → Finance Company Payment

When to Use This Workflow

Use Instalment Sales Workflow when:

• Customer wants to pay in instalments
• Customer qualifies for financing (credit check)
• High-value purchases (e.g., appliances, furniture, electronics)
• Finance partner approves the application
• Customer prefers spreading payment over months
• Common financing partners: AEON, JCL, Maybank EzyPay, Public Bank, etc.

Available Financing Options

Typical Financing Partners (Malaysia Example):

AEON Credit:

• 0% interest plans available
• 6, 12, 18, 24-month terms
• Minimum purchase: RM500-1,000
• IC and proof of income required
• Instant approval available

JCL Credit:

• Similar to AEON
• Flexible terms
• Quick approval process
• IC required

Bank Instalment Plans:

• Maybank EzyPay
• Public Bank IzziPay
• CIMB FlexiPay
• Requires credit card
• Usually 0% interest for promotions

Detailed Process Steps

Step 1: Customer Consultation and Product Selection

Responsible: Sales Staff

1. Understand Customer Needs:

   • Product requirements
   • Budget constraints
   • Payment preference

2. Explain Financing Options:

   • Available finance partners
   • Interest rates (0% or with interest)
   • Instalment terms (6, 12, 18, 24 months)
   • Monthly payment amounts
   • Documentation required

3. Calculate Monthly Instalment:

   • Product price: $______
   • Down payment (if any): $______
   • Finance amount: $______
   • Interest rate: ___%
   • Term: ___ months
   • Monthly instalment: $______

4. Product Selection:

   • Show available products
   • Check stock availability
   • Verify financing eligibility (some items excluded)
   • Customer confirms selection

Step 2: Financing Application

Responsible: Sales Staff

Collect Customer Information:

1. Required Documents (typical):

   • Identity Card (IC) - photocopy both sides
   • Proof of Income:
     • Latest salary slip (2-3 months)
     • OR Bank statement (3-6 months)
     • OR EPF statement
     • OR Income tax return
   • Utility Bill (proof of address)
   • Employment details

2. Complete Application Form:

   • Customer full name (as per IC)
   • IC number
   • Date of birth
   • Address
   • Phone number(s)
   • Email address
   • Employment information:
     • Employer name
     • Position
     • Monthly income
     • Years employed
   • Emergency contact
   • Bank account details

3. Product Details:

   • Product description
   • Model number
   • Serial number (if already assigned)
   • Purchase price
   • Down payment amount (if any)
   • Finance amount
   • Requested term (months)

Submit Application:

4. Submission Methods:

   Online Submission (Most Common):

   • Access finance partner portal
   • Upload customer IC (both sides)
   • Upload income documents
   • Fill online application form
   • Submit for instant decision

   Physical Submission:

   • Complete paper application form
   • Attach photocopies of documents
   • Customer signs application
   • Submit to finance company representative
   • Wait for approval (may take hours or days)

   Phone/SMS Approval:

   • Some finance companies offer phone-based instant approval
   • Call finance company hotline
   • Provide customer details
   • Get instant decision

5. Wait for Approval:

   • Instant approval: Online systems may approve in 5-15 minutes
   • Delayed approval: May take hours or 1-2 days
   • Customer can wait in store (if instant) or leave and return later

Step 3: Handle Approval Result

Responsible: Sales Staff

If Approved:

1. Inform Customer:

   • Congratulate customer on approval
   • Confirm approved amount
   • Confirm instalment terms
   • Explain next steps

2. Review Financing Terms:

   • Finance amount: $______
   • Interest rate: ___%
   • Number of months: ___
   • Monthly payment: $______
   • Total repayment: $______
   • First payment date
   • Processing fees (if any)

3. Proceed to Sales Order: Continue to Step 4

If Declined or Insufficient Approval:

1. Inform Customer Sensitively:

   • “Unfortunately, the finance application wasn’t fully approved”
   • Explain without embarrassing customer
   • Maintain confidentiality

2. Understand Decline Reason:

   • Insufficient income
   • Credit history issues
   • Too much existing debt
   • Incorrect information provided

3. Offer Alternatives:

   Option A: Try Different Financier:

   • Different companies have different criteria
   • May be approved by alternative finance partner
   • Submit new application

   Option B: Lower Finance Amount:

   • Increase down payment / deposit
   • Reduce financed amount
   • May get approved for smaller sum
   • Consider lower-priced products

   Option C: Co-Applicant or Guarantor:

   • Add spouse or family member as co-applicant
   • Improves approval chances
   • Both parties responsible for payment

   Option D: Alternative Payment Methods:

   • Cash payment (full or deposit + balance)
   • Credit terms (if customer qualifies)
   • Layaway plan (customer pays over time, collects after full payment)
   • Credit card (if customer has sufficient limit)

4. Maintain Relationship:

   • Don’t make customer feel bad
   • Offer to help with alternative solutions
   • Keep door open for future purchases
   • Suggest reapplying in future with improved documentation

Step 4: Create Sales Order with Financing Details

Responsible: Sales Admin

1. Create Sales Order (similar to Standard Sales):

   • Navigate to Sales Module → Create Sales Order
   • Select customer
   • Add products with quantities
   • Verify pricing

2. Specify Payment Method: “Instalment - [Partner Name]”

   • Example: “Instalment - AEON”
   • Example: “Instalment - JCL”

3. Enter Financing Details:

   • Finance partner name
   • Finance agreement number (if provided)
   • Finance approval reference
   • Finance amount
   • Down payment amount (if customer paying deposit)
   • Instalment terms (months)
   • Monthly instalment amount

4. Collect Down Payment (if applicable):

   • Some finance plans require customer down payment (e.g., 10%)
   • Collect via cash, card, or bank transfer
   • Issue receipt
   • Record in system

5. Order Totals:

   • Grand Total: $______
   • Down Payment Collected: $______
   • Financed Amount: $______
   • Payment Method: Instalment - [Partner]

6. Save and Confirm Sales Order

7. Print Sales Order for customer and warehouse

Step 5: Complete and Sign Financing Agreement

Responsible: Sales Staff & Customer

Prepare Agreement Documents:

1. Finance Company Agreement Forms:

   • Usually pre-printed multi-part forms
   • OR digitally generated and printed
   • Several copies (customer copy, company copy, finance company copies)

2. Fill Agreement Form:

   • Customer personal information
   • Product details
   • Finance amount and terms
   • Monthly instalment amount
   • Payment schedule
   • Bank account for auto-debit
   • Interest rate and charges
   • Terms and conditions

3. Explain Agreement to Customer:

   • Read key terms carefully:
     • Total amount financed
     • Interest charges (if any)
     • Monthly payment amount
     • Payment due dates
     • Late payment fees
     • Early settlement terms
     • Default consequences
   • Answer customer questions
   • Ensure customer understands obligations

Customer Signs Agreement:

4. Customer Signature:

   • Customer signs all required copies
   • Customer initials each page (if required)
   • Date the agreement
   • Customer provides bank details for auto-debit

5. Witness Signature:

   • Sales staff signs as witness
   • Company stamp applied

6. Distribute Copies:

   • Customer copy: Given to customer immediately
   • Company copy: Filed with sales order
   • Finance company copies: Submit to finance partner
   • Office copy: For accounts and admin records

7. Supporting Documents:

   • Attach copies of:
     • Customer IC
     • Income documents
     • Sales order
     • Sales invoice (when generated)

Step 6: Delivery Scheduling and Execution

Responsible: Sales Admin, Warehouse, Driver

Process: Follow Standard Sales Workflow Steps 3-9

Key Points:

• Schedule delivery as per customer preference
• Add to trip listing
• Warehouse prepares stock with serial numbers
• Generate invoice and delivery order
• Load items for delivery
• Deliver to customer with professional service
• NO payment collection at delivery (already financed)
• Obtain customer signature on delivery order
• Take delivery photos

Documents Provided to Customer at Delivery:

• Delivery Order (signed by customer)
• Sales Invoice (showing financed payment)
• Finance agreement (customer copy if not already given)
• Warranty cards
• Product manuals
• Company contact information

Step 7: Submit Agreement to Finance Company

Responsible: Sales Admin or Finance Coordinator

Submit Complete Documentation:

1. Prepare Submission Package:

   • Signed finance agreement (all required copies)
   • Customer IC photocopy (front and back)
   • Income documents (salary slips, bank statements)
   • Utility bill (proof of address)
   • Sales invoice
   • Delivery order (with customer signature proving delivery)
   • Product photos (delivery evidence)
   • Any other required documents

2. Submission Methods:

   Physical Submission:

   • Visit finance company office or service center
   • Submit document package
   • Get acknowledgment receipt
   • Note submission date and reference number

   Courier:

   • Prepare document package
   • Send via registered mail or courier
   • Keep tracking number
   • Confirm receipt with finance company

   Digital Submission:

   • Scan all documents
   • Upload to finance partner portal
   • Submit online
   • Receive digital acknowledgment
   • Note submission reference

3. Submission Timeline:

   • Submit within 7-14 days of delivery (check partner’s requirements)
   • Delays may cause payment delays or cancellations
   • Some partners require submission before delivery

4. Record Submission:

   • Note in system:
     • Submission date
     • Submission method
     • Reference number
     • Documents submitted
   • Set reminder for payment follow-up (e.g., 30 days)

Step 8: Finance Company Verification and Payment

Responsible: Finance Company (Monitor by Sales Admin/Accounts)

Finance Company Process:

1. Finance Company Receives Submission:

   • Verifies all documents complete
   • Checks customer signatures
   • Verifies delivery evidence
   • Validates product details

2. Possible Issues:

   • Incomplete documents: Finance company requests additional docs
   • Signature issues: May need customer to re-sign
   • Delivery not proven: Need delivery photos or customer confirmation
   • Product discrepancy: Product delivered differs from agreement

3. If Issues Found:

   • Finance company contacts your company
   • Provide missing documents promptly
   • Resolve discrepancies quickly
   • Resubmit if necessary

Payment from Finance Company:

4. Finance Company Approves:

   • Issues payment to your company
   • Payment methods:
     • Bank transfer (most common)
     • Cheque
   • Payment amount = Finance amount (full purchase price minus down payment)

5. Payment Timeline:

   • Typical: 14-30 days after complete submission
   • Fast track: Some companies pay in 7 days
   • Delayed: 30-60 days if issues with documentation

6. Monitor Payment:

   • Track expected payment dates
   • Check bank account regularly
   • Follow up if payment delayed:
     • Call finance company
     • Check submission status
     • Resolve any outstanding issues
   • Escalate if payment significantly delayed

Step 9: Record Finance Company Payment

Responsible: Accounts Team

1. Verify Payment Received:

   • Check bank account for incoming payment
   • Match amount with financed amount
   • Identify payer as finance company
   • Match to specific invoice/agreement

2. Record Payment in System:

   • Open relevant Sales Order/Invoice
   • Click Record Payment
   • Enter:
     • Payment Date
     • Amount Received
     • Payment Method: Bank Transfer from [Finance Partner]
     • Reference Number (bank transfer reference)
   • Attach: Bank statement screenshot showing payment

3. Update Status:

   • Invoice: “Paid”
   • Sales Order: “Completed”
   • Finance Agreement: “Settled”

4. Reconciliation:

   • Finance amount in agreement: $______
   • Down payment from customer: $______
   • Payment from finance company: $______
   • Total received: $______ (should equal grand total)
   • Any discrepancy: Investigate and resolve

5. Issue Receipt to Finance Company:

   • Generate official receipt
   • Send to finance company
   • File copy with agreement documents

Managing Instalment Sales Lifecycle

Active Monitoring:

Your Company’s Responsibilities (typically end after payment received):

• Submit complete, accurate documentation
• Ensure customer receives product
• Provide warranty support
• Respond to finance company queries

Finance Company’s Responsibilities:

• Collect monthly payments from customer
• Handle customer account issues
• Manage late payments and defaults
• Customer service for payment questions

Customer’s Responsibilities:

• Make monthly payments to finance company on time
• Maintain auto-debit bank account with sufficient funds
• Contact finance company for payment issues
• Contact your company for product/warranty issues

If Customer Defaults:

1. Customer Stops Paying Finance Company:

   • Finance company follows up with customer
   • Your company is NOT responsible for collection (finance company’s risk)
   • You already received full payment

2. Finance Company May Contact You:

   • To verify product was delivered
   • To get customer contact information
   • To verify warranty or product issues
   • Cooperate and provide requested information

3. Product Repossession (rare):

   • Finance company may repossess product
   • Requires legal process
   • Your company typically not involved
   • Depends on finance agreement terms

Best Practices for Instalment Sales

Customer Service:

• Explain Clearly: Ensure customer understands monthly payment obligation
• Don’t Over-Sell: Only recommend financing for customers who can afford it
• Accurate Information: Provide correct product and pricing information to avoid disputes
• Professional Process: Make financing application smooth and respectful

Documentation:

• Complete Forms Accurately: Errors cause delays and payment issues
• Verify Customer Information: Check IC, phone, address carefully
• Get Proper Signatures: Unsigned or incorrectly signed forms will be rejected
• Keep Copies: File all documents systematically for easy retrieval

Submission:

• Submit Promptly: Don’t delay - submit within days of delivery
• Complete Packages: Submit all required documents together
• Follow Up: Track submissions and follow up proactively
• Quick Response: If finance company requests additional documents, provide immediately

Relationships:

• Finance Partner Relationships: Maintain good relationships with finance company reps
• Regular Communication: Stay updated on policies, promotions, approval criteria
• Volume Targets: Meeting finance partner volume targets may earn better terms or faster approvals
• Customer Experience: Good customer experience leads to more approvals and referrals

Common Issues and Solutions

Issue 1: Customer Approved but Wants to Cancel

Solution:

• Before agreement signed: Can cancel, process refund
• After agreement signed but before delivery: Contact finance company, may involve cancellation fees
• After delivery: Treated as normal cancellation/return, coordinate with finance company

Issue 2: Finance Company Delays Payment

Solution:

• Follow up with assigned account manager
• Check if documents complete and acceptable
• Provide any missing information immediately
• Escalate to finance company supervisor if delayed > 45 days
• Review terms of your merchant agreement with finance company

Issue 3: Finance Company Rejects Claim

Solution:

• Understand rejection reason (incomplete docs, unproven delivery, etc.)
• Provide additional evidence
• Correct errors and resubmit
• If dispute persists: Escalate to finance company management
• Last resort: Collect payment directly from customer (difficult)

Issue 4: Customer Complaints to Finance Company

Solution:

• Finance company may hold payment if customer disputes
• Resolve customer complaint quickly
• Provide evidence to finance company (delivery photos, signed DO)
• Offer remedy to customer if legitimate issue
• Once resolved, finance company will release payment

Finance Partner Commission Structure

Many finance arrangements involve commissions or fees:

Merchant Discount Rate (MDR):

• Finance company may deduct % (e.g., 2-5%) from payment
• Example: Customer financed $1,000, you receive $980 (2% MDR)
• Or customer pays MDR (added to finance amount)

0% Interest Promotions:

• “0% interest for 12 months” promotions
• Merchant (you) usually absorbs the interest cost
• Finance company deducts this from payment to you
• Plan accordingly when pricing

Volume Incentives:

• Higher sales volumes may reduce MDR
• Monthly or quarterly volume targets
• Better rates for large merchants

Success Metrics

Approval Rates:

• Target > 70% approval rate
• Track by finance partner
• Optimize by choosing right partners for your customer profile

Submission Efficiency:

• Average days from delivery to submission: Target < 3 days
• Complete submission rate (first time): Target > 95%

Payment Timeline:

• Average days from submission to payment: Track and compare partners
• Payment delays > 45 days: Target < 2%

Volume:

• % of sales using financing: Track trend
• Total finance volume per month
• By finance partner

Related Workflows

• Standard Sales Workflow - Delivery process details
• Returns & Exchanges - Handling financed product returns
• Sales Payment Collection - General payment processing

Instalment sales through finance partners provides win-win-win: Customers afford products easier, you increase sales and get paid upfront, finance companies earn interest income.