Creating Customer Prepayments

System Location: Data Entry > AR > Billing

This topic provides details on how to create ledger entries for Customer Prepayments in Accounts Receivables.

  1. Set up a general ledger liability account called Advance Billing or Customer Prepayments.

    • This method assumes that the parts are shipped when completed and the sale is recognized in the general ledger when the parts are shipped.

  2. Create an order for the parts to be made. Do not bill from this order number until the parts are shipped.

    • Enter a manual invoice for the progressive billing amount using the same methods as regular invoicing. When creating the manual invoice, use the same part number as the part entered on the order.

    • On the General section, leave the Packing List Number field blank and manually fill in the rest of the fields.

    • Focus on the line-item section and click Add Row.

    • Enter the same Part Number(s) on the order and then click the Details button.

    • In the Accounts section, enter the GL Code for Advance Billing (or similar) instead of the normal sales account, and then click OK.

    • Enter the Job Number on the Line Items and, if you have one, the Customer PO Number. This transaction will debit Accounts Receivable and credit the Advance Billing liability account.

  3. As payments are received, enter them as a regular cash receipt by applying the check to the manual invoice created in Accounts Receivable. This transaction will debit Cash and credit Accounts Receivable.

  4. When the part is complete, create a packing list from the order created.

  5. Go to AR > Billing and use the packing list to create an invoice.

    • On the new invoice, click Add Row and add a credit line item for Advance Billing for an amount equal to all the previous billing.

    NOTE: To enter a value as a credit, place a “minus sign” in front of it.

  6. To see how much was already billed for the job, open the QuickView dropdown menu (represented by the lightning bolt icon) in the Line Items grid, and then select the Job Number to open the QuickView > Job Status details.

    • Under Billing, the Billed So Far field represents the amount you need to enter as the credit on the invoice that has already been billed. Highlight the credit line item and click the Details button.

    • Enter the GL Code for the Advance Billing account for the credit amount.

    • This transaction will credit sales for the full amount of the parts, debit the Advance Billing to clear that account, and debit Accounts Receivable for any remaining balance due.

    • Example: An Order is created for $5,000, the advance billing is for $1,000. Invoice from packing list. Highlight the Job Number, click the QuickView (lightning bolt) icon, and then select the Job Number to see how much was billed so far. Enter that amount as a credit on the invoice you bill when the part ships.

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