Advance Payments

In this article:

Setting up Advance Payment accounts for Customer and Vendor posting groups

Creating an Advance Payment

Applying Advance Payment

An advance payment is any payment made by a customer before items or services are provided.

Setting up Advance Payment accounts

To post advance payments correctly, it is necessary to set up accounts to reflect advance payments amounts to be applied in Customer and Vendor posting groups. The following procedure shows how to set up advance payment accounts for Vendor Posting Groups. For Customers, this procedure is similar and is performed on the Customer Posting Groups page.

1. Choose the icon, enter Vendor Posting Groups, and then choose the related link. Customer Posting Groups for customers.
2. For all required vendor posting groups, select an account value in Advance Payment account field. Advance Payment amounts will be reflected on these accounts before application.

Creating an Advance Payment

1. Choose the icon, enter Bank Payment Journal, and then choose the related link.
2. Fill in all required fields in the journal lines and set the Advance payment checkbox.

After posting such payment, its amount will appear on accounts which were set up in Vendor Posting Groups and Customer Posting Groups.

After the advance payment has been applied, its amount is debited from the advance payment account and credited to the account for settlements with customers or vendors. Also, advance payments can be recognized in the Customer Ledger Entry and Vendor Ledger Entry by setting a checkbox in the Advance payment field.

Appliying Advance Payment

An Advance Payment can be applied to posted or unposted document when creating a payment in the Bank Payment Journal before posting (see more in Applying payments in the Bank Payment Journal), as well as from the Customer or Vendor Ledger Entry.

Appliying Advance Payment is possible in two scenarios:

• to released purchase/sales invoice or order – scenario 1;
• to posted purchase/sales invoice or order – scenario 2.

Сценарій 1. Appliying advance payment to released purchase/sales invoice or order.

1. After posting a payment, go to Vendor or Customer Ledger Entries.
2. Standing on posted payment line, choose Actions => Functions => Apply documents in Vendor Ledger Entries and Process => Apply documents in Customer Ledger Entries.
3. In the window that opens, unposted customer/vendor documents with the Issued status will be displayed. Choose the line with the required document and select Actions => Apply => Set application for customer entries and Set application for vendor entries. In the selected line, fill in the Application code field with the payment document number.
4. After posting released documents, the system will automatically consider the set advance payment application and execute all necessary entries in General Ledger.

Scenario 2. Appliying advance payment to posted purchase/sales invoice or order.

1. After posting payment and purchase/sales invoice or order, go to Vendor or Customer Ledger Entries.
2. Standing on posted payment or invoice line, select Process => Apply entries.
3. A window with posted entries that can be applied will open. Choose the line with a required document and select Process => Set Applies-to ID. In the selected line, the Applies-to ID field will be filled out with the number of the document that is being applied. Then go to Process => Post Application.... The system will perform application and create the required entries in General Ledger.

You can check application in Vendor or Customer Ledger Entries by selecting the required document and clicking Entry => Applied entries.