How do I register an advance payment from a customer?

If a customer pays you before you've sent an invoice, for example a deposit or an advance payment, you post the payment against a liability account for advance payments. When you then create and send the actual invoice, you match the advance payment against the invoice so it's shown as paid.

Step 1: Post the advance payment

1. Go to Cash and bank transactions and select the account you received the payment to.
2. Add or select the bank transaction with the advance payment and select Match.
3. In the field Transaction relates to, select Other deposit.
4. In the field Income type, select Own selection of ledger account.
5. Select account 2420 - Advances from customers and enter the amount in Credit.
6. Select Post to ledger.

Step 2: Invoice the customer and match the advance payment

When the good or service is ready, create the invoice as usual under Sales - Customer invoices - New invoice and send it to the customer. Since the customer has already paid, you need to match the advance payment against the invoice manually so it's shown as paid.

1. Go to Accounting - Journal entries and select New journal entry.
2. Fill in the Date and Description.
3. Add account 2420 - Advances from customers and enter the amount in Debit.
4. Add a line with account 1510 - Accounts receivable and enter the same amount in Credit.
5. Click the list icon in the column Invoice on the line with account 1510 and select the invoice you sent to the customer.
6. Select Post to ledger.

The invoice is now shown as paid in your customer invoice list.

Related topics

	How do I mark an invoice as paid?
	How do I register a partial payment of a sales invoice?
	Can I link an already posted journal entry to a bank transaction?

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