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50 advance payment invoice format

in this presentation we will create an invoice and apply a credit or advanced payment to it in other words the scenario is that we had a customer come into the shop they want a guitar we sell guitars we don't have the particular one that they want we're gonna order that guitar for them but we want a security deposits that gave us a security deposit or a prepayment on the sale now we're gonna make the invoice and we need to apply that prepayment to the invoice that we are creating get ready because here we go with sage 50 cloud accounting here we are in outward get great guitars file we're gonna start off by opening up our reports this time we're gonna go to the reports drop-down we're gonna go to the let's go to the financial statement reports open up that balance sheet report so we're gonna be opening up the balance sheet I'm in the current period for February that's the one I want so I'm gonna say ok and then I'm gonna maximize this report and recall last time that we entered a deposit so we had a security deposit it's in accounts receivable but it's there as a negative receivable so we have this credit it's not tying out to anything so the count accounts receivable account itself it's still positive showing people owing us money but it's understated by the 250 until we actually complete the work to receive to receive that and enter the invoice that will match out against it so to see this more clearly let's take a look at another report closing that back out and then opening up going back to our reports go into the accounts receivable reports up top then we want to take a look at the customer ledger I'm gonna be opening up the customer ledger report and then in this Andersen that 250 right there for that particular customer Andersen isn't applied out to anything so that's the problem and so it's actually a negative receivable so that's okay because logistically that works well for us because then while it's in the receivables we can tie it out to an invoice so as long as the invoice happens in the same time period and this doesn't cross over the cutoff we won't have to do any kind of adjusting entry for it it will be fine if that is still outstanding and we have not yet issued the invoice as of the cutoff date then we would need to do an adjusting entry to make the financial statements correct as of the cutoff date we would be increase in the receivable and increasing or increase in the liability so what we're gonna do now is say now we have the customer is going is going to purchase the guitar so here's our scenario we you know the person came in they wanted the guitar we didn't have the color they wanted so we said hey we're gonna order it from the vendor and we want a security deposit so we had to enter the deposit first we got money we got $250 on the guitar that we haven't not yet delivered and therefore we got the receipt before of the money so we put that in as a negative receivable which again is a little bit funny it kind of it actually means that we owe the customer money which normally would be a liability account it's you know it's really a liability in essence because they gave us money and we owe them something we owe them the guitar now we're gonna go back in terms of our flow chart here and go to the first thing which is usually the first thing where where you will create an invoice and then we need to apply out that payment to it so I'm gonna go to the sales item I'm gonna say this is gonna be a new sales invoice now this is kind of a two-step process we will make the invoice and then we'll apply out the credit the prepayment the deposit from the customer to it so we're gonna say I'm just gonna say it's a customer ID I'm gonna say it's Anderson Anderson is this person that if we have this this deal with they have made a prepayment for us and then we're gonna go through here and I'm gonna say this happened let's say on the 18th now or the 19th something like that we'll be fine and then the invoice I'm gonna put an invoice number just for a practice problem here and then I'm gonna go down and we're gonna say that we're selling one it's gonna be an e LP once again one of our standard LPS but it's that one that it was green with like that strap that they wanted so we're gonna have that one and then we're gonna say the sales tax on it is gonna be down here will apply the sales tax now here's the amount that's owed the five forty seven fifty but they already paid us to two fifty I'm not gonna apply that out here on the invoice we're gonna then tie this invoice out to that free payment so what is this gonna do when we record it just like any invoice is an invoice it's going to increase the accounts receivable by that five forty seven fifty but it's going to match out between that two-fifty so we got that then the other side is going to be going to revenue for the 500 the difference going to this sales tax payable the forty seven fifty and the inventory is going to be going down by four hundred which is driven by this inventory item that's not shown on this report and cost of goods sold goes up by the four hundred so let's go ahead and do that so we're gonna say save this and then I'll close this back out and then if I look it up the invoice now if I go to this invoice thing and I say I want to view and edit the invoices view and edit the invoices I'll make this large you'll note that this invoice that we have made is not showing any payment on it right these two these two items have been paid if I was to double click or open an invoice that had been paid and open that up then it's gonna say hey it was paid in full this one right here hasn't been paid yet even though it's not showing any payment even though we got two hundred and fifty on it because we had got it before you know they we made the invoice so we have to tie that two hundred fifty out to it now if we look at the financial statements before we do that let's take a look at what happened to the financials it's gonna be the standard the standard kind of process here if we open up the balance sheet we're gonna say that the the accounts receivable went up so if I double click on the AR it's going up by that five forty seven fifty and that to fifty kind of matches out it's already matching out in here you know this accounts already basically correct now it's just that that two fifty isn't applied to that actual invoice so it's a problem with our with our matching problem even though the GL account is basically correct in the receivable at this point in time so just note that we still have a problem but it's kind of correct in terms of the in number right here on the financial statements it is correct and then the other side is going to be going to the revenue account so if we were to open up the income statement let's do that back on over taking a look at the financial statement reports financial statement reports let's take a look at the income statement report for the month of February I'm going to remove these zero balances and say okay so the income statement we have the sales item up top if we double click on the sales item then we're going to see that five hundred dollars that is the amount that we get to keep not including the sales tax then the sales tax is gonna be of course back on the balance sheet if we go back on over to the balance sheet report we see the sales tax it's gonna be at a payable account so sales tax payable that 3:29 I won't go in it now but it's gonna be there then the inventory item is is going down by the 400 so inventory goes down by 400 driven by the the item and the other side is on the income statement so the income statement if we jump to the income statement then we have the cost of goods sold is being affected by the 400 as well so that's the the standard invoice transaction also note that if I go back to the report for the receivable the receivable report here and we were to refresh that now then you can see that that 547 50 and the 250 it's matching out here at this point in time and so that the balance is correct but again these two aren't matched out if I was to go into this this invoice it's gonna be showing as unpaid even though I got 250 for it all right so how are we gonna match that out that's the problem so we're gonna go back on over and say we need to match this out so let's go back on over here a couple ways you can do it now you might think of it this way if you just create the invoice you might create the invoice and then say I'd like to go back into it and say now view and edit the invoice and then actually open up the invoice that you're dealing with that's unpaid here and then you can pay it from this section right I could say I'm gonna just choose this pay now section pay now and then match out what has been paid already which is going to be the 250 250 and the 547 you're gonna match those out now what happened when we do this we basically entered a received payment form so so for example if I close this out another method we get to the same area without recording that I'm going to close this out to get to that same area I'm gonna close this out I'm going to close this out it we just go to the receive money and I'm gonna say receive payment now we're not receiving payment we already got the 250 before we're just basically applying it out at this time now we're not actually gonna record it right now I just want to show how it would be done right so we're gonna go up top and we're gonna say this is Anderson and so then we're gonna say Anderson now if they're gonna pay us the rest the deposit the rest of this you can see these two are matching out the 250 matches out to that about 540 750 so when they pay that balance do I would check both of these off and then they're still gonna owe us then the 290 750 so when they pay us that they're gonna pay us at 290 750 I'll check both of these off and then we will have completed this transaction that'll show the invoice then having been paid after we record this transaction and and that'll complete the process so that's gonna be how we finish this off I won't do it at this point of time I'm gonna close this for now and we're gonna say the transaction edit has been changed so I'm gonna say no don't record that at this point in time and then of course the amount that is due at this point in time for Anderson is represented we can run the balance it's actually the four forty seven ninety ninety eight and that represents like we say both the transaction that we have thus far so if we go to Anderson here which includes the prepayment and the sale item plus there was a transaction before that and er still since still owed us four so if we were gonna run a report for Anderson how about how much does Anderson owe us we can then take a look at this and I'm gonna bring this back to January so we could see January's detail and say okay and we see that we have this four four forty eight ninety eight that was never was never paid here as well so what's owed for Anderson if we were gonna pull out the old trusty calculator the four four eight point nine five and then and then plus the five forty seven fifty minus the two fifty that was paid to us that's what is making up the seven forty forty six forty five that is still do or owed to us from Anderson at this point in time [Music] you