Hi, I am trying to resolve an issue relating to customer advance payments. I have two bank accounts: Customer Deposit Account and Office Account. I received advance payment from a customer which I deposited into a deposit account. Now I have created an invoice for the work done. Please guide me how to deal with these transactions. 1. I want the customer deposit to be applied to the invoice created. 2. The invoice amount to be credited from customer deposit account to office account. Thanks in advance
I described these procedures and provided a link to the applicable Guide in my answer to a previous question you posted:
https://forum.manager.io/t/customer-deposits-and-advances/7093
It makes no difference which cash account the money goes into or comes from. The key is to handle both deposit and receipt of the customer’s payment of the sales invoice through Accounts receivable, as described in that Guide.
Movement of funds between the two accounts is an entirely separate matter, recorded with a Transfer money transaction.
@Tut
The guide you referred to above works but the only challenge is it it does not present the true picture (exact amount) of accounts receivable. I can’t determine the actual value of accounts receivable and customers deposits. I think a provision should be made for proper handling of customers deposit.
If you want more obvious distinction between accounts receivable against sales invoices and deposits, use special accounts. See this Guide: Manager Cloud. There is an example about a manufacturer receiving deposits.
To be clear, there is nothing about the standard approach that is improper. The presentation merely offsets amounts paid as deposits against amounts owed as receivables. This is a very common accounting practice and does, in fact, present a true picture of your financial position with a customer. However, some prefer more a more obvious breakdown.