This guide explains how to handle advance payments in Netvisor. The guide covers both situations where the order section is in use and situations without it.
If an advance payment is received from a customer for an invoice dated to a different month (in the future) than the advance itself, VAT can be processed for settlement in Netvisor according to the following examples. Processing requires manual entry of vouchers into the accounting. The examples deal with domestic sales, but if there is a need to similarly process EUMY and EUUM, they also require their own auxiliary accounts in the chart of accounts.
Handling advance payments when the Order section is in use
1. Set up two auxiliary accounts in the chart of accounts, e.g., 2862 Advance Payments VAT Processing and 2864 Advance Payments Interim Account
2. If the customer pays the advance with the reference number of the sales order, the payment is automatically allocated to the customer's sales order. The allocation can also be done manually if the automatic allocation was not successful. An MS voucher is created in the accounting for the day of the payment entry. The entries are as shown in the image below.
3. At the end of September, check the balance of account 2861 Received Advances and investigate from where VAT needs to be forwarded. If necessary, distribute the amounts to the correct VAT rates.
4. At the end of September, record the balance of account 2861 to the auxiliary account established in the same account group.
5. The balance sheet now looks like this:
6. In October, the sales order is processed and invoiced. The invoice is dated to October. The accounting voucher looks like this:
7. At the same time as the invoice was created from the sales order, the receivables were automatically recorded against the received advances.
8. At the end of October, the balances of accounts 2862 and 2864 are reversed. At the same time, a counter-entry is created to the VAT liability account, so the VAT impact of the invoice is zero. -VAT was already processed in September.
Handling advance payments without the Order section
1. Set up two auxiliary accounts in the chart of accounts, e.g., 2862 Advance Payments VAT Processing and 2864 Advance Payments Interim Account. This is done in the same way as in the previous guide's image.
2. Record the received payment in the accounting with a new voucher, dated in this example as 15.9.2014. (Voucher no. 30, same as in the guide above).
3. At the end of September, check the balance of account 2861 Received Advances and investigate from where VAT needs to be forwarded. If necessary, distribute the amounts to the correct VAT rates.
4. At the end of September, record the balance of account 2861 to the auxiliary account established in the same account group. (Voucher no. 31, same as in the guide above).
5. The balance sheet looks the same as in the corresponding point in the previous guide.
6. In October, record the actual invoice in the ledger and print it. The invoice should have a VAT entry as usual. (Accounting voucher no. 379 same as in the guide above).
7. Record a manual payment for the invoice and use the invoice date as the date, and put "To Account" as, for example, "cash". After this, take the voucher into edit mode and replace account 1900 with account 2861 Received Advances. (Voucher no. 25, same as in the previous guide).
8. At the end of October, reverse the balances of accounts 2862 and 2864, and at the same time, a counter-entry is created to the VAT liability account, so the VAT impact of the invoice is zero. -VAT was already processed in September. (Voucher no. 32, same as in the previous guide).
Keywords: Advance payment, advance payment, auxiliary account, interim account
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