Advance Invoices and Advance Invoice Payments—Key Exercises

Basic Data Setup

Basic Data Requirements for Advance Invoicing

Purpose: The purpose of this exercise is to set up basic data required for advance invoicing. 

Note: The basic data required will be found in the following links and will be the same as the data required for invoicing process. The data will differ according to the tax regime's the customer or the company's are using,

Basic Data for Instant Invoicing

Basic Data for Manual Customer Invoicing

Setting up the base for Advance Invoicing

Purpose: The purpose of this exercise is to specify the base amount to be used with the advance invoicing process.

Windows:
Company

  1. Open the Company window.
  2. Click the Distribution tab.
  3. Select your company querying for it.
  4. Select the Gross Amount with Charges as the base amount to be used when creating advance invoices from the Base for Advance Invoice list.

Main Exercise

Purpose: The purpose of this lesson is to enable users to enter an advance invoice using a customer order, make payments for the advance invoices created and then create the final invoice for the customer order and make payments for the amount remaining.

Assume a customer has placed a customer order worth 50 000 USD, and the supplier expects an advance payment of 10 000 USD from the customer before the goods are delivered. The customer, therefore will be invoiced for 10 000 USD. When the payment is done by the customer the goods will be delivered at a later date and the customer will then be invoiced for the rest of the invoice amount. (40 000 USD) When invoicing the customer for the remaining amount a reference to the paid advance invoice will be given in the invoice.

The same process can be done without using a customer order which is also specified below.

 

Advance Invoicing from Customer Order

Creating an Advance Invoice using a Customer Order

When the Tax Regime is VAT/Mixed

Purpose: The purpose of this exercise is to create an advance invoice for a customer order, requesting the customer for a payment to be made before the goods/services have been delivered.

Windows:
Customer Order
Customer Invoice

  1. Open the Customer Order window
  2. Enter a customer order header and save it.
  3. Enter a new customer order line and save.
  4. Right-click on the order header and select the option Create Advance Invoice to open Create Advance Payment Invoice dialog box.
  5. In the Advance Invoice tab, indicate the amount or the percentage, you can choose.
  6. Review the parameters in the Tax Info section. It is possible to activate or deactivate the Apply Tax check box.
     Note: When the Base for Advance Invoicing for the company is Gross Apply Tax, by default the check box is not selected.
  7. If desired, via the LOV you can change the Tax code that shall apply.
    Note: The base amount for tax is the total advance Invoice Amount.
  8. Review the parameters in the Payment Info section. Update the payment base date or the payment terms if needed.
  9. To create an advance invoice, click the Create button. The invoice will be in status preliminary.
    Note: You can create and print the invoice by clicking on the Create and Print button.
  10. Right-click on the order header and select the option Invoice Info. The Customer Invoice Lines window will display all invoices connected to the customer order. The newly created advance invoice will be visible here. 
  11. By opening the Customer Invoice, you can analyze and print the advance invoice.
  12. Right-click on the invoice header and select the option Customer Invoice Postings Analysis, here you can analyze the special posting created for the advance invoice.

Note: If the Use Price Incl Tax check box is selected for the customer order, the Base for Advance Invoicing field on the Company/Distribution tab must be set to the gross amount or the  gross amount with charges.

When the Tax Regime is Sales Tax

Purpose: The purpose of this exercise is to create an advance invoice for a customer order, requesting the customer for a payment to be made before the goods/services have been delivered.

Windows:
Customer Order
Customer Invoice

  1. Open the Customer Order window
  2. Enter a customer order header and save it.
  3. Enter a new customer order line and save.
  4. Right-click on the order header and select the option Create Advance Invoice to open Create Advance Payment Invoice dialog box.
  5. In the Advance Invoice  tab, indicate the amount or the percentage, you can choose.
  6. Review the parameters in the Tax Info section. It is possible only to activate or deactivate the Apply Tax check box.
    Note:     When  the Base for Advance Invoicing for the company is Gross Apply Tax, by default the check box is not selected.
  7. Sales details are shown in the Tax Info section. The tax amount shown is the per tax code total for the total order proportionate to the advancing percentage given above.
    Note: Tax Amount = (per tax Code Total for the full order) X (Advancing percentage)
    When tax regime is sales tax modification in the     Tax Info section is not allowed. Any modification to the taxes should be done in the preliminary invoice. The base for the tax amounts has been picked from the individual lines.
  8. Review the parameters in the Payment Info section. Update the payment base date or the payment terms if needed.
  9. To create an advance invoice, click the Create button. The invoice will be in status preliminary.
    Note: You can create and print the invoice by clicking on the     Create and Print button.
  10. Right-click on the order header and select the option Invoice Info. The Customer Invoice Lines window will display all invoices connected to the customer order. The newly created advance invoice will be visible here. 
  11. By opening the Customer Invoice, you can analyze and print the advance invoice.
  12. Right-click on the invoice header and select the option Customer Invoice Postings Analysis, here you can analyze the special posting created for the advance invoice.

Payment of an Advance Invoice

Purpose: The purpose of this exercise is make the payment of the advance invoice created.
Note: In order to enter a Mixed Payment, the basic data required to make the mixed payment should be set up.

Basic Data for Mixed Payment

Windows:
Mixed Payment
Customer Analysis

  1. Open the Mixed Payment window and create a new record.
  2. Enter your cash account or use the List of Values for the Cash Account field. You will get default values for currency, currency rate, and balance method if you have defined a default balance method for this account.
  3. Set the Balance Method to either Detailed or Group.
  4. Click the Transactions tab.
  5. Create a new record. In the Mixed Payment Transaction Type list, click Enter Customer Payment.
  6. In the Ledger Item Series ID field to enter the series Id of the instant invoice you saved earlier.
  7. In the Ledger Item No. field, enter the number of the instant invoice you saved earlier.
  8. The customer identity and amount from the invoice is now displayed in the payment transaction.
  9. Save the payment transaction. Note the voucher number created as a result of the payment.
  10. Open the Customer Analysis window and query for the invoice number. You can see the advance invoice is paid and that a new payment in advance ledger item has been created. This payment in advance will be used to offset the final invoice amount.

Creating the Final Instant Invoicece

Purpose: The purpose of this exercise is create an instant invoice with a reference made to an already paid advance invoice.
Note: In order to enter a Mixed Payment, the basic data required to make the mixed payment should be set up.

Basic Data for Mixed Payment

Windows:
Instant Invoice
Customer Analysis

  1. Open the Instant Invoice window.
  2. Create a new record (F5).

Note: Invoice type, invoice date, and delivery date are proposed values. 

  1. Using the List of Values (F8), select a customer set up for use of VAT.

Note: All customer data will be filled in automatically.

  1. In the General tab, change the entry in the Payment Term field from 30 to10.
  2. Right-click on the window, and select Advance Invoice Reference. The Advance Invoice Reference window will be displayed. Select the table part of the window and create a new record.
  3. In the Invoice No field, enter the identity of the advance invoice you created earlier (amounting to 10000 USD) or choose from List of Values. Other fields of the table will be automatically populated using the information on the advance invoice you selected.
  4. Click the Lines tab.
  5. Create a new record (F5).
  6. In the Object Id field, select one of the existing sales objects from the List of Values (F8).
  7. In the Quantity field, enter 10. Make sure the Amount field adds up to 50 000 USD.
  8. Create a new record (F5).
  9. Change the tax details if necessary.
  10. Save the information (F12).
  11. Print the invoice by right-clicking on the window and then selecting Print Invoice. In the printed copy you will see the reverence to the advance invoice created earlier. The invoice will therefore, carry a due amount of 40 000 USD after deducting the amount of the advance invoice. (You can preview the invoice by clicking Preview.)
  12. Note down the identity of the instant invoice you created.
  13. Query for your invoice in the Customer Analysis window to view details about the invoice you entered. Right-click on the record and select Payments per Invoice to view details about the payments for the invoice which will show you that the final invoice has been offset with the paid advance invoice.

Payment of the Final Invoice

Purpose: The purpose of this exercise is make the payment of the advance invoice created.
Note: In order to enter a Mixed Payment, the basic data required to make the mixed payment should be set up.

Basic Data for Mixed Payment

Windows:
Mixed Payment

  1. Open the Mixed Payment window and create a new record.
  2. Enter your cash account or use the List of Values for the Cash Account field. You will get default values for currency, currency rate, and balance method if you have defined a default balance method for this account.
  3. Set the Balance Method to either Detailed or Group.
  4. Click the Transactions tab.
  5. Create a new record. In the Mixed Payment Transaction Type list, click Enter Customer Payment.
  6. In the Ledger Item Series ID field to enter the series Id of the instant invoice you saved earlier.
  7. In the Ledger Item No. field, enter the number of the instant invoice you saved earlier.
  8. The customer identity and amount from the invoice is now displayed in the payment transaction. Note the amount of the payment will be 40 000 USD. This is after the amount paid for the advance invoice is deducted.
  9. Save the payment transaction.

Advance Invoicing without Customer Order

Creating an Advance Invoice without using a Customer Order

Purpose: The purpose of this exercise is to create an advance invoice, requesting the customer for a payment to be made before the goods/services have been delivered.

Windows:
Instant Invoice

  1. Open the Instant Invoice window.
  2. Create a new record (F5).

Note: Invoice type, invoice date, and delivery date are proposed values. 

  1. Using the List of Values (F8), select a customer set up for use of VAT.

Note: All customer data will be filled in automatically. You can manually change the invoice type which will result in a separate invoice series. (for example AI, which denotes that it is an Advance Invoice)

  1. In the General tab, change the entry in the Payment Term field from 30 to 10.
  2. Select the Advance Invoice check box.
  3. Click the Lines tab.
  4. Create a new record (F5).
  5. In the Object Id field, select one of the existing sales objects from the List of Values (F8).
  6. In the Quantity field, enter 10. Make sure the Amount field adds up to 10 000 USD.
  7. Create a new record (F5).
  8. In the Text Id field, select one of the existing text types from the List of Values (F8).
  9. In the Description field, change the description to Thank you for your order!.
  10. Change the tax details if necessary.
  11. Save the information (F12).
  12. Print the invoice by right-clicking on the window and then selecting Print Invoice.
  13. Note down the identity of the advance instant invoice you created.

Payment of an Advance Invoice

Purpose: The purpose of this exercise is make the payment of the advance invoice created.
Note: In order to enter a Mixed Payment, the basic data required to make the mixed payment should be set up.

Basic Data for Mixed Payment

Windows:
Mixed Payment
Customer Analysis

  1. Open the Mixed Payment window and create a new record.
  2. Enter your cash account or use the List of Values for the Cash Account field. You will get default values for currency, currency rate, and balance method if you have defined a default balance method for this account.
  3. Set the Balance Method to either Detailed or Group.
  4. Click the Transactions tab.
  5. Create a new record. In the Mixed Payment Transaction Type list, click Enter Customer Payment.
  6. In the Ledger Item Series ID field to enter the series Id of the instant invoice you saved earlier.
  7. In the Ledger Item No. field, enter the number of the instant invoice you saved earlier.
  8. The customer identity and amount from the invoice is now displayed in the payment transaction.
  9. Save the payment transaction. Note the voucher number created as a result of the payment.
  10. Open the Customer Analysis window and query for the invoice number. You can see the advance invoice is paid and that a new payment in advance ledger item has been created. This payment in advance will be used to offset the final invoice amount.

Creating the Final Instant Invoice

Purpose: The purpose of this exercise is create an instant invoice with a reference made to an already paid advance invoice.
Note: In order to enter a Mixed Payment, the basic data required to make the mixed payment should be set up.

Basic Data for Mixed Payment

Windows:
Instant Invoice
Customer Analysis

  1. Open the Instant Invoice window.
  2. Create a new record (F5).

Note: Invoice type, invoice date, and delivery date are proposed values. 

  1. Using the List of Values (F8), select a customer set up for use of VAT.

Note: All customer data will be filled in automatically.

  1. In the General tab, change the entry in the Payment Term field from 30 to 10.
  2. Right-click on the window, and select Advance Invoice Reference. The Advance Invoice Reference window will be displayed. Select the table part of the window and create a new record.
  3. In the Invoice No field, enter the identity of the advance invoice you created earlier (amounting to 10000 USD) or choose from List of Values. Other fields of the table will be automatically populated using the information on the advance invoice you selected.
  4. Click the Lines tab.
  5. Create a new record (F5).
  6. In the Object Id field, select one of the existing sales objects from the List of Values (F8).
  7. In the Quantity field, enter 10. Make sure the Amount field adds up to 50 000 USD.
  8. Create a new record (F5).
  9. Change the tax details if necessary.
  10. Save the information (F12).
  11. Print the invoice by right-clicking on the window and then selecting Print Invoice. In the printed copy you will see the reverence to the advance invoice created earlier. The invoice will therefore, carry a due amount of 40 000 USD after deducting the amount of the advance invoice. (You can preview the invoice by clicking Preview.)
  12. Note down the identity of the instant invoice you created.
  13. Query for your invoice in the Customer Analysis window to view details about the invoice you entered. Right-click on the record and select Payments per Invoice to view details about the payments for the invoice which will show you that the final invoice has been offset with the paid advance invoice.

Payment of the Final Invoice

Purpose: The purpose of this exercise is make the payment of the advance invoice created.
Note: In order to enter a Mixed Payment, the basic data required to make the mixed payment should be set up.

Basic Data for Mixed Payment

Windows:
Mixed Payment

  1. Open the Mixed Payment window and create a new record.
  2. Enter your cash account or use the List of Values for the Cash Account field. You will get default values for currency, currency rate, and balance method if you have defined a default balance method for this account.
  3. Set the Balance Method to either Detailed or Group.
  4. Click the Transactions tab.
  5. Create a new record. In the Mixed Payment Transaction Type list, click Enter Customer Payment.
  6. In the Ledger Item Series ID field to enter the series Id of the instant invoice you saved earlier.
  7. In the Ledger Item No. field, enter the number of the instant invoice you saved earlier.
  8. The customer identity and amount from the invoice is now displayed in the payment transaction. Note the amount of the payment will be 40 000 USD. This is after the amount paid for the advance invoice is deducted.
  9. Save the payment transaction.