Overview

This article outlines the process of creating, allocating, and managing advance payments for both customers and suppliers in iVendNext.

1. What is an Advance Payment?

An Advance Payment is a payment made by a customer or to a supplier before the actual invoice is generated. This is often required for high-value orders or services. In iVendNext, advance payments are recorded separately and can be allocated against future invoices.

Key Benefits of Advance Payments:

• Improves cash flow management.

• Reduces the risk of non-payment.

• Helps in maintaining accurate financial records.

2. Prerequisites for Advance Payments

Before creating an advance payment entry, ensure the following are set up in iVendNext:

• Party (Customer/Supplier): The party making or receiving the advance payment.

• Payment Account: The bank or cash account from which the payment is made or received.

• Advance Accounts:

• For Customers, create a 'Receivable' type account under Liability.

• For Suppliers, create a 'Payable' type account under Assets.

3. Creating an Advance Payment Entry

The steps to create an Advance Payment Entry are:

3.1 Creating an Advance Payment for a Customer

1. Go to the Sales Order and click on Make > Payment Entry.

2. Set the required details, such as the payment amount and payment account.

3. Save the entry. The system will automatically update the 'Paid To' account with the advance account maintained in the company master.

4. Submit the Payment Entry.

3.2 Creating an Advance Payment for a Supplier

1. Go to the Purchase Order and click on Make > Payment Entry.

2. Set the required details, such as the payment amount and payment account.

3. Save the entry. The system will automatically update the 'Paid From' account with the advance account maintained in the company master.

4. Submit the Payment Entry.

4. Allocating Advance Payments to Invoices

Once an advance payment is recorded, it can be allocated against future invoices. This ensures that the outstanding amount is reduced accordingly.

4.1 Allocating Advance Payments for Customers

1. When creating a Sales Invoice, click on the Get Advance Received button.

2. The system will fetch the advance payment entries for that customer.

3. Allocate the advance amount against the invoice.

4. Save and Submit the Sales Invoice.

4.2 Allocating Advance Payments for Suppliers

1. When creating a Purchase Invoice, click on the Get Advances Received button.

2. The system will fetch the advance payment entries for that supplier.

3. Allocate the advance amount against the invoice.

4. Save and Submit the Purchase Invoice.

5. Managing Advance Payments in Separate Party Accounts

iVendNext allows you to book customer advances under Liability and supplier advances under Assets. This ensures that advance payments are correctly categorized in your financial statements.

5.1 Setting Up Separate Party Accounts

1. Go to Company > Accounts > Advance Payments.

2. Maintain the advance accounts for customers (under Liability) and suppliers (under Assets).

5.2 Creating Advance Payments in Separate Accounts

1. When creating a Payment Entry, the system will automatically update the advance account based on the party type (Customer or Supplier).

2. Ensure that the advance accounts are correctly mapped in the company settings.

6. Limitations of Advance Payment Management

While iVendNext provides robust support for advance payments, there are a few limitations to keep in mind:

• Currency Restrictions: Advance accounts are restricted to the company's default currency.

• Party Types: Currently, advance payments are only supported for Customers and Suppliers.