How to handle advance payments in the ERP?

In the ERP, cash advances are a very useful function when managing an organization, and it should ensure that all criteria and requirements are complied with in its use. From this feature, you can include cash advances in the sales and purchases documents and deduct cash advances in Current Account.

Remarks on VAT

Legally, when performing cash advances, the VAT is required when the company receives the corresponding value. When including the cash advances in a document, the app will calculate the VAT value on the total deducted value, considering that the VAT regarding the cash advance has been previously settled.

Example:

Let's consider that a specific customer has performed an order of 600€ (VAT included at 20%) and, in that moment, ha has made a cash advance of 150€.

• Cash Advance Value= 150€ (IVA = 25€)

When the customer retrieved the order, the invoice presented the following values:

• Goods: 500€

• VAT: 75€

• Others: -125€

• Total: 450€

These values match the case of a series without included VAT. In the case of a series with included VAT, the cash advance value would be 150€ (part "Others"), and the Total is the same in both situations.

Handling advance payments

When handling advance payments, the following criteria must be followed:

• The advanced payments must be handled with VAT;

• The advanced payments are registered with an invoice;

• The VAT clearing must be done with a credit note (as stipulated by order 8632/2014) and this clearing can only be done after issuing the final invoice;

• Not cleared advance payments must be visible at any moment;

• SAF-T must be correctly filled in;

• The account statement (for current accounts) must provide evidence of all client records;

• Accounting and the correct account must be consistent at all times;

To perform the regularization of advance payments, you must:

1. Go to [Marketing & Sales] | Sales | Documents;

2. Create a new document, indicating an entity for which an advance payment invoice has already been issued:

   • An advance payment invoice is considered a document with payable nature, linked to the current account under an account type configured as an advance payment, and ideally with no link to inventory;

3. Go to Context | Advance Payments Regularization;

   • The upper grid will show all the advance payment documents available for use;

   • The lower grid shows the detail (lines) of the advance payment document selected in the upper grid;

4. Indicate which credit document to use to regularize the advance payment. This document must be a financial document, with payable nature, with no link to current accounts, and ideally with no link to inventory, and with the Control qty. fulfilled at source option enabled;

5. Indicate the issue reason for the credit note;

6. Select the advance payment document you want to regularize, or the lines and the corresponding amount to regularize, if you only want to regularize part of the advance payment document;

7. Click Confirm.

8. Complete the creation of the final invoice and click Save;

9. When the invoice is saved, the advance payment amount will be regularized on the invoice itself, that is, a document for the automatic settlement of the advance payment will be generated. You must configure the advance payment's adjustment document in the Administrator:

   1. Go to Administrator | Company | Payables and Receivables | Company Parameters;

   2. Go to the Other tab;

   3. Specify the Adjustment Document.

Considerations:

• You cannot use the same advance payment document for both the regularization of advance payments and the advance payment deduction process. Each advance payment can only follow one of these two flows/processes.

• The final invoice amount must always be equal to or greater than the advance payment amount being regularized.

• Only advance payments that have the same currency as the final invoice can be regularized;

• The Final invoice documents, as well as the generated Credit Note, cannot be changed or canceled;

• The full relationship between the documents is ensured, both in terms of traceability and in the completion of the SAF-T file.

Deduct cash advances for entities

To deduct a cash advance in current account for a specific entity (Customer or Supplier, whether Sales or Purchases), follow these steps:

1. Access [Marketing & Sales / Purchases] | [Sales / Purchases] | Documents;

2. Select the document type Invoice;

3. Specify the entity: If it contains advance payments in current account, a message will be presented with this warning;

4. Access the Advance Payments in Current Account context operation;

5. On the presented window, it is possible to view on the column "Open Item" the open items in Cash Management for that advance payment. In turn, the column "Value" allows to insert the cash advance amount (that can be total or partial);

6. Click Confirm;

7. Check if a new row is presented on the sales editor with the amount inserted on the "Value" column;

8. Finally, click Save.

If the total open item value in sales is negative, you cannot perform a cash advance in current account. This operation is not possible because despite the document nature being payment, the total document is negative, and it has the properties of a receivable document and not of a payable document.

Deduct advance payments in current account

To deduct an advance payment in current account for a specific entity, follow these steps:

1. Access Marketing & Sales | Sales | Documents;

2. Access the Advance Payments in Current Account context operation;

3. Select the advance payments to be included on the document;

4. Click Confirm.

Perform advance payments in current account

To perform an advance payment in current account, follow these steps:

1. Access [Marketing & Sales / Purchases / Finance] | Payables and Receivables | Documents;

2. Select the customer;

3. Select the document of the advance payment type;

4. Specify the advance payment value;

5. Click Save.

If you wish to perform an advance payment in account with no link to current accounts, you must use the context option Advance Payments.