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Processing Prepayment Invoices in AR

In some countries, prepayments are subject to tax reporting requirements. When a company receives a prepayment from a customer, it is typically required to report taxes on that prepayment in its tax return for the period in which the prepayment was received. This means that the company must account for the prepayment tax as part of its overall tax obligations.

Additionally, in certain countries, a company must issue a document to a client (prior to issuing an invoice) upon which a prepayment for the ordered items will be made.

To help companies meet these requirements, Acumatica ERP offers the prepayment invoice functionality. With this functionality, you can create prepayment invoices for the items and services ordered. The system calculates taxes on each prepayment invoice. Once the prepayment invoice is paid, your company can report the taxes in the reporting period in which the prepayment was received. Later, you create an AR invoice for the items or services provided, and the prepayment invoice can be used as a payment for the sales invoice.

In this chapter, you will learn how to create and process prepayment invoices, and you will explore the GL transactions created in the system by this process.

Back to TopIn This Chapter

  • AR Prepayment Invoices: General Information
    • In some countries with value-added tax (VAT) regulations, companies are required to report taxes upon receiving prepayments from clients. Typically, prepayments should be reported in the company's tax filings for the period in which they were received.
  • AR Prepayment Invoices: Correction of a Prepayment Invoice
    • In certain cases, a prepayment invoice may need to be voided or reversed. This could happen, for instance, if the items included in the prepayment invoice are no longer needed, or if the data entry clerk made an error while entering the specified amount.
  • AR Prepayment Invoices: Effortless Refunds
    • In Acumatica ERP, you can quickly issue refunds for unapplied or partly applied prepayment invoices, whether you're dealing with partial or full refunds. This ensures accurate financial records, simplifies workflows, and provides greater control over accounting processes.
  • AR Prepayment Invoices: Payment Links
    • You can use Acumatica ERP’s payment link capabilities to send payment links for prepayment invoices, just as you can for other AR documents. You can easily create an open payment link for a released prepayment invoice with the Pending Payment status and share it with customers as a convenient URL or QR code directly on the printed invoice.
  • AR Prepayment Invoices: Generated Transactions
    • As you process a prepayment invoice, you start by creating and releasing this prepayment invoice. Then you apply a payment to the prepayment invoice, and finally, you apply the prepayment invoice to the AR invoice. To track the movements of invoice balances, including taxes, the system generates the GL transactions described in the following section.
  • AR Prepayment Invoices: Related Reports and Inquiry Forms
    • In the following sections, you can find details about the reports, inquiry forms, and dialog boxes you may want to review to gather information about the business process.