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Recording Advance Payments

For some purchases, you might need to send an advance payment to the supplier. You can record advance payments by creating a separate invoice for the advance. Then, when you receive the main invoice for the purchase, create an additional invoice line to reverse the advance payment.

Follow this procedure to record advance payments.

To Record an Advance Payment

1.	Create an extra charge to be used for the advance (for example, called “Advances”). Skip this step if this extra charge is already created in your system.

See Setting up Extra Charges.

2.	Create the purchase order and line for the item being purchased. You might want to record the advance payment in the purchase order comments.

See Creating a Purchase Order.

3.	Create an invoice to record the advance payment:

See Entering an Invoice.

•	On the invoice, enter an extra charge line. Select the “Advances” extra charge.

•	In the Distribution section, select Charged to the accounts below and then enter the same accounts as were charged on the purchase order line (for example, the work order the material was being ordered for).

•	Save and post the invoice.

4.	Receive the purchase order.

See Receiving Purchase Orders and Blanket Releases.

5.	Enter an invoice for the purchase order:

•	Enter a line matched to the purchase receipt.

•	Enter an extra charge line to reverse the advance. The amount of this line is the negative of the amount of the advance from the first invoice.

•	Distribute the “advance” line to the purchase order accounts.

6.	Save and post the invoice.