Manage advance payments
You can receive a payment before a sale is completed or a service is provided. Depending on how you operate, the software offers three methods for recording this amount.
#1. Invoicing the amount received: Prepaid Purchases
If you want to issue an invoice as soon as the payment is received, use the Prepaid Purchases feature.
How does it work?
- Create a sale corresponding to the amount received. This amount is generally subject to taxes as soon as it is collected, depending on the nature of the transaction.
- Record this amount in the Prepaid Purchases account.
- When the final sale takes place, deduct the amount already invoiced from the remaining balance due.
Learn more about prepaid purchases
#2. Recording an available balance on the customer's account: Store Credit
If you want to keep an amount available for the customer without issuing a sales invoice when the payment is made, use the Store Credit feature.
How does it work?
- Add the amount received to the customer's store credit balance.
- If necessary, print a payment receipt.
- For a future purchase, use the available store credit to pay for all or part of the sale, using the CRED payment method.
The available balance is therefore kept on the customer's store credit account until it is used.
#3. Recording a sale with installment payments: Deferred Payments
If you want to record a sale immediately for its full amount, even though the customer only pays part of the amount upfront, use the Deferred Payments feature.
How does it work?
- Finalize the sale for its full amount.
- Record the amount received as the first payment using the DIV payment method.
- Record the remaining balance as a deferred payment, to be settled at a later date.
The entire sale is recorded as soon as it is finalized, while payment can be made in several installments.
Learn more about deferred payments
#Things to Know
An amount paid before a sale is completed or a service is provided may have different implications for invoicing, accounting, and taxes.
When a payment is received before a specific sale is completed or a service is provided, tax generally becomes due as soon as the payment is collected, depending on the nature of the transaction.
Important: Choose the recording method that reflects the actual nature of the transaction. If you are unsure about the accounting or tax treatment, consult your accountant.