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Level 1

Apply money from Savings Acct to A/R Invoice (partial pmt)

A client pre-paid $1000 for future invoices, this was deposited into Savings.  How do I apply money to A/R invoices, I have 3 invoices to pay from this money currently in Savings account.

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Level 15

Apply money from Savings Acct to A/R Invoice (partial pmt)

The destination of the funds does not define the Reason you got the funds. You don't need to use Banking for this.


When you got the funds, you are supposed to show Why = a Service or Other Charge item on a Sales Receipt. That item links to Income, if you are a cash basis entity. It links to Liability, if you are an accrual basis entity or otherwise allowed to hold Liability.


Later, you make the actual sale as Invoice. Make a credit memo/Refund for the customer using the same Prepayment item, dated the same as the invoice. Apply this to the invoice. This reduces the total owed to a Net. The point here is to show the funds Already paid to you are a Value for that customer that you just applied to the actual sale. You also can issue a Refund from a credit memo, if the customer cancels the order or the total you apply doesn't use the prepayment in full.


Don't confuse Banking with the Reason you got the funds. The Reason you got their money is Prepayment, and you show the Prepayment is applied, later. Banking is never part of the handling of Prepayment.


When you decide to move money from checking to savings or savings to checking, all of this is already your own money and these transfers never affect Customer Names.

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