This help explains how to handle advance payments in Netvisor. The help covers both situations where the Order section is in use and situations without it.


CONTENTS


If an advance payment is received from a customer for an invoice dated to a different month (in the future) than the advance itself, you handle VAT for settlement in Netvisor according to the following examples. Processing requires manual entry of vouchers into the bookkeeping. The examples deal with domestic sales. If you similarly handle EUMY and EUUM sales, you must create separate auxiliary accounts for them in the specification of accounts.

Handling advance payments when the Order section is in use

You can handle an advance payment when the Order section is in use as follows:

  1. Set up two auxiliary accounts in the specification of accounts in the same account group:

    • 2862 Advance payments VAT processing
    • 2864 Advance payments interim account

  1. When the customer pays the advance with the reference number of the sales order, the system automatically allocates the payment to the customer's sales order.

    • If the automatic allocating is not successful, you allocate the payment manually to the sales order.
    • A bookkeeping voucher is created in the bookkeeping for the day of the payment entry.
    • The entries correspond to those shown in the image below.

  1. At the end of the voucher's target month, check the balance of account 2861 Received advances.

    • Investigate from which advance the VAT must be forwarded.
    • If necessary, distribute the amounts to the correct VAT rates.

  2. At the end of the voucher's target month, record the balance of account 2861 Received advances to the auxiliary account created in the same account group (for example, account 2862 Advance payments VAT processing).

  1. The balance sheet then looks as shown in the image below.

  1. In the following month, you take the sales order to processing, invoice it and date the invoice to this month.

    • An accounting voucher is created with the invoice date and looks as shown in the image below.

  1. When you created the invoice from the sales order, the trade receivables were automatically recorded against the received advances.

  1. At the end of the month, you reverse the balances of accounts 2862 Advance payments VAT processing and 2864 Advance payments interim account.

    • At the same time, a contra entry is created to the VAT liability account.
    • The VAT impact of the invoice is then zero, because VAT was already handled in the voucher's target month.

Handling advance payments without the Order section

You can handle an advance payment without the Order section as follows:

  1. Set up two auxiliary accounts in the specification of accounts in the same account group:

    • 2862 Advance payments VAT processing
    • 2864 Advance payments interim account

  2. Set up the accounts in the same way as shown in the image in the previous help.

  3. Record the received payment in the bookkeeping with a new voucher.

    • Use the date of the payment as the date (in the example 15.9.2014).
    • Use the same voucher number as in the example (Voucher no. 30, same as in the help above).

  4. At the end of the voucher's target month, check the balance of account 2861 Received advances.

    • Investigate from which advance the VAT must be forwarded.
    • If necessary, distribute the amounts to the correct VAT rates.

  5. At the end of the voucher's target month, record the balance of account 2861 Received advances to the auxiliary account created in the same account group.

    • Use the same voucher number as in the example (Voucher no. 31, same as in the help above).

  6. The balance sheet then looks the same as in the corresponding point in the previous help.

  7. In the following month, you record the actual invoice in the ledger and print it.

    • Make sure that the invoice has a VAT entry as usual.
    • The accounting voucher corresponds to the example (Voucher no. 379, same as in the help above).

  8. Record a manual payment for the invoice.

    • Use the invoice date as the date.
    • Select, for example, cash in the To account field.
    • After this, take the voucher into edit mode.
    • Replace account 1900 with account 2861 Received advances.
    • Use the same voucher number as in the example (Voucher no. 25, same as in the previous help).

  9. At the end of the month, you reverse the balances of accounts 2862 Advance payments VAT processing and 2864 Advance payments interim account.

    • At the same time, a contra entry is created to the VAT liability account.
    • The VAT impact of the invoice is zero, because VAT was already handled in the voucher's target month.
    • Use the same voucher number as in the example (Voucher no. 32, same as in the previous help).

 

Frequently asked questions

Question: How do I handle an advance payment in Netvisor when the invoice is dated to a future month?
Answer: You handle the advance payment by recording the payment in the bookkeeping, checking the balance of account 2861 Received advances at the end of the target month, transferring the balance to an auxiliary account and later reversing the balance of the auxiliary accounts, as described in the steps of the help. VAT is handled in the voucher's target month.

Question: To which accounts are advance payments recorded for VAT processing?
Answer: You create auxiliary accounts in the specification of accounts, for example 2862 Advance payments VAT processing (or Advance payments VAT processing) and 2864 Advance payments interim account, and use them in VAT processing of advance payments together with account 2861 Received advances.

Question: How is VAT handled on advance payments?
Answer: You check the balance of account 2861 Received advances at the end of the target month, distribute the amounts, if necessary, to the correct VAT rates and record the balance to the auxiliary account. At the end of the month, you reverse the balance of the auxiliary accounts, which creates a contra entry to the VAT liability account and the VAT impact of the invoice is zero, because VAT has been handled in the target month of the advance.

Question: What do I do if the Order section is not in use?
Answer: You record the received payment with a new voucher, handle the balance of account 2861 Received advances at the end of the target month, record the actual invoice in the following month in the ledger, make a manual payment for the invoice and replace account 1900 with account 2861 Received advances. Finally, you reverse the balances of auxiliary accounts 2862 and 2864.

Question: Do I need separate auxiliary accounts for EUMY and EUUM sales?
Answer: You need separate auxiliary accounts in the specification of accounts for EUMY and EUUM sales if you handle advance payments in the same way as for domestic sales.

Keywords: Advance payment, advance payment, auxiliary account, interim account

 

 

This article has been translated using an AI-based translation tool. The contents or wording of these instructions may differ from those in other instructions or in the software.


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