Customer prepayments

Use customer prepayments when you receive a payment from a customer but don't have an invoice to settle the payment. These types of payments are also referred to as customer deposits.

The process of setting up and working with customer prepayments consists of the following basic steps.

1. Create a customer posting profile for prepayments.
2. Set the Posting profile with prepayment journal voucher parameter.
3. Create a customer payment journal, and select the Prepayment journal voucher checkbox on each line.
4. Post the customer payment journal.
5. After an invoice is generated, settle the prepayment with it by using the Settle open transactions page.

Create a customer posting profile for prepayments

Typically, when you accept prepayments or deposits from your customers before goods or services are delivered, or before an invoice exists in your system, record the cash as a liability instead of an asset in your chart of accounts. However, the requirements for recording these amounts in your general ledger might differ, depending on your country or region. Therefore, consult your accountants about any local regulations that apply.

In general, the process for creating a posting profile that you can use for prepayments is the same as the process for creating other posting profiles. The primary difference is the main account that you select in the Summary account field. For more information, see Customer posting profiles.

Define parameters for customer prepayments

Two main Accounts receivable parameters require consideration when you configure the system for customer prepayments. Follow these steps to configure the parameters.

1. Go to Accounts receivable > Setup > Accounts receivable parameters.
2. (Optional) On the Ledger and sales tax tab, on the Payment FastTab, set the Sales tax on prepayment journal voucher option to Yes.
3. In the Posting profile with prepayment journal voucher field, select the customer posting profile to use when customer prepayments are posted.
4. Close the page.

Create customer prepayment vouchers

When you create the customer payment journal, set the Prepayment journal voucher option to Yes on the Customer payment journal page for every prepayment. Follow these steps to create a customer prepayment.

1. Go to Accounts receivable > Payments > Customer payment journal.

2. Select New to create a journal.

3. In the Name field, select the journal name to use.

   Important

   If you set the Sales tax on prepayment journal voucher option to Yes in the previous procedure, select a journal name where the Amount includes sales tax parameter is selected.

4. (Optional) In the Description field, enter a detailed description.

5. Select Lines.

6. If a blank line doesn't exist, select New to create a line.

7. In the Date field, enter the date when the prepayment should be posted.

8. In the Account field, select the customer for the prepayment.

9. (Optional) In the Description field, enter a detailed description of the transaction.

10. In the Credit field, enter the amount of the prepayment.

11. In the Offset account field, select the account to offset the payment to. For example, select the bank or main account to post the payment to.

12. In the Method of payment field, select the customer's method of payment.

13. On the Payment tab, set the Prepayment journal voucher option to Yes.

14. Repeat steps 7 through 13 for each additional prepayment that you must post.

15. Select Post to finalize the journal.

Settle prepayments with invoices

Use the Customer payments workspace to easily find and settle payments that aren't fully settled.

1. On the Home dashboard, select the Customer payments tile.
2. In the Customer transactions section, on the Payments not settled tab, search for and select the payment to settle.
3. Select Settle transactions.
4. Select the Mark checkbox for the invoice and the payment that you want to settle.
5. Select Post.

For more information about how to settle open transactions, see Settlement overview.