Working with advance payments (proformas) is common. We use them as a payment request to our customers. Only after they are paid do the next steps follow, from shipping the goods to issuing the final invoice (tax document).
An intermediate step before issuing the final invoice can be creating an advance payment tax document (ZDD). Another guide describes how to create one easily. It can then be deducted in the same way as an advance invoice.
In this guide:
Deducting an unpaid advance
By default, a standalone advance can be deducted once it has been paid (that is, once it is matched with a bank or cash document). If you also want to be able to deduct unpaid advances, you can enable this in the company settings: in Settings at the bottom left, open Modules › Sales, switch to the Advanced tab, and select Allow deduction of unpaid issued advance. Save the settings with the Save and close button.
You can make the same setting on the purchasing side for received advances (Modules › Purchasing).
Creating an invoice from an advance
If you have an advance and want to create a final invoice from it right away, with the advance deducted, and you don't want to create an advance payment tax document, there is nothing easier than using the dedicated function in the advance detail.
Requirements for using this procedure:
The advance invoice has line items (the advance amount was not entered through the document header).
The advance invoice does not generate a stock document (that is, its creation is not set up in the document type).
The advance invoice is paid (if it isn't, deduction of unpaid advances must be enabled in the company settings).
If the advance meets these requirements, we can continue.
Step 1: Open the advance detail, click the … (More actions) button next to the Close button in the bottom right corner, and select Create invoice from advance.
Step 2: The Create invoice from advance panel opens on the right. In the Document type field, select the invoice type for the new final invoice (tax document) and confirm with the Create invoice button.
Step 3: After the invoice is created, the advance detail is displayed again. The Deducted label and a link label Advance deduction pointing to the new invoice are added to its header. In the issued invoices, you will find the final invoice with the advance's items and an Advance deduction line with a negative amount.
📝 The same procedure can be used on the purchasing side, that is, for a received advance.
Deducting an advance / ZDD in an existing tax document
The second situation that can arise when working with an advance is deducting the advance in a final invoice that has already been created.
⚠️ To deduct an advance invoice, the final invoice must have line items, meaning the invoice amount must not have been entered only through the document header.
Step 1: Open the invoice detail, click the … (More actions) button in the bottom right corner, and select Deduct advance/ZDD.
Step 2: The Deduct advances or ZDDs panel opens, offering the documents that can be deducted from the invoice. Advance payment tax documents are in the Select ZDD to deduct section, and advance invoices are in the Select advance invoice to deduct section. Mark the documents to deduct by selecting their checkboxes; you can select multiple documents at once.
Step 3: Partial deduction is also available. Each selected document has a Deduct all available amounts checkbox. If you leave it cleared, you can adjust the amount to be deducted for each VAT rate. The percentage value indicates the VAT rate of the given deduction; for a ZDD, the amounts for each rate are entered excluding VAT. At the bottom of the panel, the Summary shows the document amount, the total of the selected advances, and the difference.
Step 4: Confirm the deduction with the Deduct advance/ZDD button. If the deduction is successful, you will find the advance deduction in the invoice as an item with a negative value (for a ZDD, the Deduction of advance payment tax document item), and labels of the deducted documents in the invoice header.
📝 The same procedure can be used on the purchasing side, that is, for a received advance.
⚠️ A ZDD can be deducted only if it is matched with the payment of the advance invoice. A manually created ZDD with no link to a payment cannot be deducted.
FAQ
Not sure how to match an advance with a payment?
You can find the procedure in the guide on importing bank statements and matching transactions with documents.
Want to create a ZDD for the advance and deduct that instead?
Learn how in the guide on creating a ZDD and linking it to a payment.