Working with advance payments (deposits) is a common practice. We use them as payment requests to our customers. Only after they are settled do the next steps follow — from dispatching goods to creating the final (definitive) invoice (tax document).
An intermediate step in creating the final invoice may be the creation of a advance payment tax document. How to create it easily is described in our separate guide. It can then be deducted in the same way as an advance invoice.
By default, a standalone advance payment can be deducted once it has been settled (i.e., when it has been matched with a bank or cash document). If you want the option to deduct unsettled advance payments as well, this can be enabled in the company settings.
The same setting can also be configured on the purchasing side for received advance payments.
Creating an Invoice from an Advance Payment
If we have an advance payment available and want to use it to directly create a final invoice with its deduction — without creating an advance payment tax document — nothing could be simpler than using the dedicated service in the issued invoices agenda.
The prerequisites for using this procedure are:
The advance invoice is not line-item-free (i.e., the advance amount was not entered via the document header).
The advance invoice does not generate a warehouse document (or does not have generation enabled in the document type).
The advance invoice has been settled (if not, the company setting to allow deduction of unsettled advance payments must be active).
If the advance payment meets these conditions, you can proceed. Simply select the advance payment you want to "convert" into a final invoice;
and use the "Create invoice from advance payment" service.
After selecting the invoice type to be created from the advance payment, the invoice will be generated.
Whether the advance payment has been deducted can be found in the "Advance deduction" column for the respective advance invoice.
Note:
The same procedure can also be applied on the purchasing side, i.e., for received advance payments.
Deducting an Advance Payment / Advance Tax Document in an Already Created Tax Document
The second scenario that may arise when working with advance payments is deducting the advance payment in an already created final invoice. This option can be found in the line items section of the relevant invoice.
The entire procedure is described in our video guide. Please watch it for more information.
Note:
The same procedure can also be applied on the purchasing side, i.e., for received advance payments.
Note 2:
An advance tax document can only be deducted if it is matched with the payment of the advance invoice. An advance tax document created manually without a link to a payment cannot be deducted.
FAQ
Not sure how to match an advance payment with a payment? Find out in our guide.
Want to create an advance tax document for your advance payment and deduct that instead? Find out how in our guide.