How to Record Advance Payments and Tax Documents for Advance Payments
ABRA Flexi has precisely defined rules and procedures for handling advance payments and tax documents for payments. To record these documents, we will again create new advance payment document types and tax documents for advance payments (TDAPs) valid only for the periods being transferred.
Recording Advance Payments by Deduction and Settlement Type
We must also distinguish between several types of advance payment statuses:
Advance payment has been issued but not yet settled – record it using the document type Advance Payment – Not a Tax Document; in double-entry bookkeeping, no accounting entry is made; in single-entry bookkeeping, use the appropriate posting rule (for VAT payers using single-entry bookkeeping, apply the split into tax base and VAT for any future documents related to the received payment);
Advance payment has been issued and settled, but not yet deducted – record it using the document type Advance Payment – Not a Tax Document and settle it in the relevant currency via the cash register or a newly entered bank transaction; post the settlement to the appropriate advance payment account with the cash register/bank account as the contra account;
Advance payment has been issued, settled, and partially deducted – record the undeducted amount using the document type Advance Payment – Not a Tax Document and settle it in the relevant currency via the cash register or a newly entered bank transaction; post the settlement to the appropriate advance payment account with the bank account or cash register as the contra account;
Advance payment has been settled, a tax document for the payment has been issued, and it has not yet been used for deduction or has only been partially deducted – record the full/residual amount using the document type Advance Payment – Not a Tax Document and settle it in the relevant currency via the cash register or a newly entered bank transaction; use the service to create a TDAP document; post the advance payment settlement to the appropriate advance payment account with the bank account or cash register as the contra account; post the generated TDAP and, if necessary, update the tax document number and its variable symbol.
Before processing advance payment settlements, the cash registers and bank accounts must already be set up (see the next step – Creating the Organization's Cash Registers and Bank Accounts).
A tax document for an advance payment can also be recorded in another way – entering a TDAP from a previous period
Although this procedure may seem complex, we recommend using it – it enables subsequent deduction of advance payments or tax documents via the service.
The preceding steps can be skipped; however, in that case, advance payment/TDAP deduction line items must be entered manually in any invoices created thereafter.
When maintaining double-entry bookkeeping, be aware of the following software behavior – a settled advance payment or a created TDAP is not treated as a receivable/payable posting. If these documents are issued in a foreign currency, they are not automatically revalued at the last day of the accounting period. Therefore, it is necessary (not only during an accounting migration) to perform the revaluation manually and record the exchange rate difference using an internal document, posting it to the advance payment account with a clearing account as the contra account.