Understanding the GL Impact of Advance Payments in Hungary
- Lou Dizon
Sample use case:
Partial advanced Payment has been made for a sales order.
Total Sales Order Amount: 50 Euro
Partial Advanced Payment: 10 Euro
Step 1: An advanced payment invoice has been created.
Advanced Payment Invoice | ||
|---|---|---|
Account | Debit | Credit |
Accounts Receivable | 10 |
|
Other Current Liability This is the account selected for the Payment Type item used in the Advanced Payment Invoice.
This entry will be offsetted by the future final A/R of the actual sales invoice. |
| 10 |
Step 2: The payment transaction for the advanced payment invoice has been created
Payment | ||
|---|---|---|
Account | Debit | Credit |
Accounts Receivable |
| 10 |
Other Current Liability This is the account selected for the Payment Type item used in the Advanced Payment Invoice.
This entry will offset the A/R entry from the advanced payment invoice. | 10 |
|
Step 3: The actual invoice for the sales order has been created
Actual Sales Invoice | ||
|---|---|---|
Account | Debit | Credit |
Accounts Receivable | 40 |
|
Revenue Account |
| 50 |
Other Current Liability This is the account selected for the Payment Type item used in the Advanced Payment Invoice.
This account will be the clearing account for the advanced payment recorded and will be offsetted by the advanced payment line in the actual final invoice. | 10 |
|
Step 4: The payment transaction for the actual invoice for the sales order has been created
Payment | ||
|---|---|---|
Account | Debit | Credit |
Accounts Receivable |
| 40 |
Other Current Liability This is the account selected for the Payment Type item used in the Advanced Payment Invoice.
This account will be the clearing account for the advanced payment recorded and will be offsetted by the advanced payment line in the actual final invoice. | 40 |
|
Conclusion:
At the end of this process:
Open A/R for this transaction has been closed.
Bank Account has 50 Euros.
The Other Current liability account is netted to zero