From time to time I have had clients that use Order Entry ask, “How can we send an invoice to a customer for a prepayment”. This is not a simple “out of the box” solution. The problem is that since the sales order is entered, adding another invoice in AR not only causes the potential for incorrectly adding to Sales, but then to fix it, once the sales order is shipped and invoiced, the prepayment invoice in AR invoice needs to be credited. As a result, usually the only option is to manually create a “fake” invoice and send it to the customer. The obvious problem with this is that you don’t have any record of the invoice in Sage.
Below is a method that will resolve this dilemma:
With this method, when the customer pays you for the AR advanced invoiced, you can apply it to the AR invoice. When you ship and invoice the order, it will now show the full cost of the line items you are billing AND will include the misc. negative charge representing the amount you already billed in AR thereby deducting it from the total invoice amount in AR which is the remaining balance after the prepayment that should be paid.
Furthermore, this will not adversely affect your General Ledger. The AR invoice will credit the prepaid liability account and debit AR, but the misc. negative charge from OE will offset the prepaid liability. The total actual sales from the items in the order will be in sales, but the net amount of sales, less prepayment will be in AR.
