How to handle "advance" payments [Best Practices]

GolfNut72 · ‎August 02, 2020

I have a client who will occasionally pay me before the 1st of the month. The client is invoiced on the 1st.

Sometimes the payment is deposited before the 1st.

What is the correct procedure for recording that payment [since there is no outstanding invoice]?

And then when the invoice is created on the 1st how do I attach that payment to the invoice.

Thanks

EJ

Kristine Mae · ‎August 02, 2020

You can record a retainer, GolfNut72. I'm here to guide you.

The retainer will act as a liability to show that even your business received the payment already, it doesn't belong to you until you've created an invoice or pay for services. Once you create an invoice and receive the payment, the liability will turn into income.

We have different steps to complete the process which can be found in this reference that I'll be sharing with you.

If you have additional questions, you're always welcome to drop a comment below. Keep safe!

View solution in original post

Kristine Mae · ‎August 02, 2020

You can record a retainer, GolfNut72. I'm here to guide you.

The retainer will act as a liability to show that even your business received the payment already, it doesn't belong to you until you've created an invoice or pay for services. Once you create an invoice and receive the payment, the liability will turn into income.

We have different steps to complete the process which can be found in this reference that I'll be sharing with you.

If you have additional questions, you're always welcome to drop a comment below. Keep safe!

View solution in original post

RusnaBrpakpahan · ‎August 03, 2020

Hi There

To create an advance payment transaction follow the steps given below:

Select + New.
Click on 'Advance Payment' option under Suppliers
Select the supplier from the drop down for "Payee"
Select the account through which the payment is made in "Choose an account" drop down.
Enter the Payment Date.
Enter the total amount (including TDS) in the 'Amount box'
In TDS Amount section select the section under which the TDS will be deducted & Click on 'Calculate TDS' link
Based on the transactions done for the supplier during the financial year and amount of TDS already deducted for him, QuickBooks will calculate and populate the TDS amount in the box. If you would like to change the amount you can edit and change the amount.
Click on Save & Close button to save this transaction.

GolfNut72 · ‎August 03, 2020

Kristine

Thank you. The information you provided was very helpful. I knew some of the steps but not all of the steps and the document that you directed me too answered all of my questions, I think.

I'm still going through it, but I was able to resolve the issue that I had.

Thank you

EJ

GolfNut72 · ‎August 03, 2020

RusnaBrpakpahan

Thank you for your reply but this is an advanced client payment, not a vendor/supplier payment.

I invoice my customer on the 1st of each month, but he sometimes elects to pay me on the 30th or 31st of the previous month.

EJ

Topics

Training

Community

Resources

How to handle "advance" payments [Best Practices]