How to receive Advance amount from customer in bank or cash in hand
Is this advance against a sales invoice, then receive it like any other customer payment
If its not against a sales invoice, then perhaps a sales invoice should be created
The ideal approach would be to allocate the receipt to
Customer credits account for the specific customer.
How to confuse an Irishman, no offence to the Irish, it just an adage that’s used .
Sometimes @Tut, being technically correct is one thing but making bookkeeping that boring and complicated is another. Increasingly, people using accounting packages are self employed or not operating traditional administration therefore us “professionals” need to communicate as educators rather then purists. If that means the user get the right result without being technically correct - there has been a win.
Once again, @Brucanna, I agree with you. I am all for getting things done in the easiest way possible without creating problems by violating fundamental accounting principles. In my original reply on this topic, I confused a limitation on sales invoice allocation with receiving of money. So I’ve edited my comments.
So…@adeelsheikh1, the answer to your original question is now simpler. First, be sure you have created the customer. Then, in either the Bank Accounts or Cash Accounts tab, Receive Money and allocate the receipt to Customer credits and your customer. Manager will automatically apply the credit when you create a sales invoice.
By the way, I’m not an accounting professional, just a small-time business owner who taught himself double-entry accounting in the old days of paper journals and ledgers (on that lovely green paper). I suppose enough time has passed to admit that I originally got it all wrong, completely reversing debits and credits. Of course, since I was totally consistent in my error, everything worked out. That is probably the best example you could ask for of getting the right result without being technically correct. To this day, I actually think that was an advantage, because I still must stop and think carefully about the accounting equation whenever I do anything.
Off topic but, I used professionals in quotes not in relation to accounting qualifications but in reference to those who have extensive learnt knowledge of accounting and/or Manager and who are so willing to share and guide others - there is plenty of evidence within this forum to illustrate that that hat suit you.
In my opinion this transaction should be:
D: Bank (money in bank account)
D: Bank charges (cost)
C: Customer advance (or some other liability account)
the invoice is issued:
D: Customer credit
D: Customer advance
C: Customer credit
How to do this in Manager?
I think you just in the Bank Account Receive Money against the Customer Credit and Select your customer name.
how do you record bank charges?
I had to record a payment in bank account in order to balance (D: bank charges, C: bank account)
D: bank account 110 (money in 100 + 10 bank charges)
C: customer credit 110
then (as “spend money”)
D: bank charges 10
C: bank account 10
at the end everything balance, but in my opinion is quite intricate…
When you receive Money, you can add line below the customer credit.
Lets Say the first line customer credit for 110
you add line and put it bank charges -10
so in the end the total money that you receive will be 100.
the transaction will be recorded as D: -10 (egual to C: 10) in bank charges account?
No, because this transaction will be like
D Cast At Bank 100
D Bank Fee 10
C Customer Credit 110