Financial Obligations allow you to track all your incoming or outgoing payments linked to an agreement and to manage the notifications needed to ensure all obligations on a contract are met. A financial obligation can be linked to one or more payments, which in turn can be executed, partially executed or not executed. Payment types can include milestone payments, recurrent payments (royalties) or classic payments (upfront fee). Payment tracking in Inova can be useful for reporting and budgeting purposes.
Creating a financial obligation
Financial obligations are created by clicking the New button in the financial obligations tab.
- Enter the name of the obligation and link the transaction party or company. The list of available transaction parties in this field is automatically filtered to only include the company or companies linked to the agreement.
- Optional: If the due date of the obligation is not defined in the contract, but instead is based on the completion of a milestone, link the financial obligation to a triggering activity. The payment due dates will be calculated automatically based on the completion date of this triggering activity.
You have to create the activity on the agreement before linking it in this field. For further information, see triggering activities.
- Select the people to be notified about upcoming due dates.
- Configure the timeframe for each notification. Ensure the rest of the required fields are filled in, then click Save when done.
Creating a single payment
Once you have created a non-financial obligation, you must create the related payment record(s).
- Enter the due amount. This can be modified later if needed.
- Enter the due date.
If this is a financial obligation with a triggering activity, the due date cannot be selected : it will be automatically set when the triggering activity is completed. In such cases, you can set a forecasted due date for budgeting purposes.
- Both forecasted amount and forcasted due date can be used if the payment date (as with a milestone payment) and/or amount (as with a royalty payment) are not fixed or defined in the contract.
Creating multiple payments
- Enter the due date of the first payment.
- Enter the total number of payments.
- Enter the total amount or amount of each payment.
The payment currency is defined at the financial obligation level.
- Enter the payment frequency. Based on this selection and your choices from #1 and #2, the system will automatically generate the correct number of payments with their corresponding due dates. You can always add additional payments to the obligation as needed.
Executing a payment
- Execute a payment by clicking the dollar sign button.
- If you enter a payment amount that's less than the full amount due, the system will register the payment as partially paid and the paid date won't be defined.