{"id":92,"date":"2009-02-21T07:47:59","date_gmt":"2009-02-21T15:47:59","guid":{"rendered":"http:\/\/mysmartermanager.com\/2009\/02\/processing-pre-payments-in-smarter-manager\/"},"modified":"2009-02-21T07:47:59","modified_gmt":"2009-02-21T15:47:59","slug":"processing-pre-payments-in-smarter-manager","status":"publish","type":"post","link":"https:\/\/www.smartermanager.com\/blog\/processing-pre-payments-in-smarter-manager\/","title":{"rendered":"Processing Pre-Payments in SMARTer Manager"},"content":{"rendered":"

Processing Pre-payments in SMARTer Manager
\n<\/strong><\/span><\/p>\n

Method A:
\n<\/strong><\/span><\/p>\n

1. Upon receipt of a prepayment, create a debit transaction in the checking account. Go to Accounting\/Checkbooks\/Checkbooks. Click on the Debits button and create a new debit. On the accounts distribution section, post the amount to your prepayments account. This will debit checking and credit the prepayments account.
\n<\/span><\/p>\n

2. Then create a Credit in the Accounts Receivable. Go to Accounting\/Accounts Receivable\/Invoices & Credit and add a new credit. The account code on the item is your prepayment account. Make sure to print the credit so it creates the appropriate journal entries.
\n<\/span><\/p>\n

3. Next, when you ship the item, it will create an invoice. This will debit AR and credit Sales.
\n<\/span><\/p>\n

4. Finally, payment of the invoice. Create a deposit. Apply the outstanding credit created in Step 2 to the invoice created in Step 3. This will debit checking and credit AR.
\n<\/span><\/p>\n

\n\n\n<\/col>\n<\/col>\n<\/col>\n<\/col>\n<\/colgroup>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Step<\/span><\/td>\nAccount<\/span><\/td>\nDebit<\/span><\/td>\nCredit<\/span><\/td>\n<\/tr>\n
1<\/strong><\/span><\/td>\nChecking<\/span><\/td>\n$100.00<\/span><\/td>\n<\/td>\n<\/tr>\n
1<\/strong><\/span><\/td>\nPrepayment<\/span><\/td>\n<\/td>\n$100<\/span><\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
2<\/strong><\/span><\/td>\nA\/R<\/span><\/td>\n<\/td>\n$100<\/span><\/td>\n<\/tr>\n
2<\/strong><\/span><\/td>\nPrepayment<\/span><\/td>\n$100<\/span><\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
3<\/strong><\/span><\/td>\nA\/R<\/span><\/td>\n$1000<\/span><\/td>\n<\/td>\n<\/tr>\n
3<\/strong><\/span><\/td>\nSales<\/span><\/td>\n<\/td>\n$1000<\/span><\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
4<\/strong><\/span><\/td>\nChecking<\/span><\/td>\n$900<\/span><\/td>\n<\/td>\n<\/tr>\n
4<\/strong><\/span><\/td>\nA\/R<\/span><\/td>\n<\/td>\n$900<\/span><\/td>\n<\/tr>\n
Notes: Overall this is a very clean method. However, there is not a way to tie the initial debit transaction to a customer so tracing the payment could be a challenge. The prepayment is not reflected on the final invoice.<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

Method B:
\n<\/strong><\/span><\/p>\n

1. Upon receipt of a prepayment, in Accounting\/Accounts Receivable\/Invoices and Credits, create a manual invoice for the prepayment. On the item, the account used is the prepayment account. This will debit AR and credit the prepayment account.
\n<\/span><\/p>\n

2. Create a deposit applying the prepayment to the invoice created in step 1. This will debit checking and credit AR.
\n<\/span><\/p>\n

3. Again go to Accounting\/Accounts Receivable\/Invoices and Credits and create a manual credit for the prepayment. Again, on the item, the account used is the prepayment account. This will credit AR and debit the prepayment account.
\n<\/span><\/p>\n

4. When you ship the item, it will create an invoice for the full amount. This will debit AR and credit Sales.
\n<\/span><\/p>\n

5. Finally, payment of the invoice. Create a deposit. Apply the outstanding credit created in Step 3 to the invoice created in Step 4. This deposit will debit checking and credit AR.
\n<\/span><\/p>\n

\n\n\n<\/col>\n<\/col>\n<\/col>\n<\/col>\n<\/colgroup>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Step<\/span><\/td>\nAccount<\/span><\/td>\nDebit<\/span><\/td>\nCredit<\/span><\/td>\n<\/tr>\n
1<\/strong><\/span><\/td>\nA\/R<\/span><\/td>\n$100.00<\/span><\/td>\n<\/td>\n<\/tr>\n
1<\/strong><\/span><\/td>\nPrepayment<\/span><\/td>\n<\/td>\n$100<\/span><\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
2<\/strong><\/span><\/td>\nChecking<\/span><\/td>\n$100<\/span><\/td>\n<\/td>\n<\/tr>\n
2<\/strong><\/span><\/td>\nA\/R<\/span><\/td>\n<\/td>\n$100<\/span><\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
3<\/strong><\/span><\/td>\nPrepayment<\/span><\/td>\n$100<\/span><\/td>\n<\/td>\n<\/tr>\n
3<\/strong><\/span><\/td>\nA\/R<\/span><\/td>\n<\/td>\n$100<\/span><\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
4<\/strong><\/span><\/td>\nA\/R<\/span><\/td>\n$1000<\/span><\/td>\n<\/td>\n<\/tr>\n
4<\/strong><\/span><\/td>\nSales<\/span><\/td>\n<\/td>\n$1000<\/span><\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
5<\/strong><\/span><\/td>\nChecking<\/span><\/td>\n$900<\/span><\/td>\n<\/td>\n<\/tr>\n
5<\/strong><\/span><\/td>\nA\/R<\/span><\/td>\n<\/td>\n$900<\/span><\/td>\n<\/tr>\n
Notes: Again, a fairly clean method. However, if you run a report on all invoices <\/em>to a customer, you could overstate your sales to a customer. The prepayment is not reflected on the final invoice.<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

Method C:
\n<\/strong><\/span><\/p>\n

1. Upon receipt of a prepayment, in Accounting\/Accounts Receivable\/Invoices and Credits, create a manual invoice for the prepayment. On the item, the account used is the prepayment account. This will debit AR and credit the prepayment account.
\n<\/span><\/p>\n

2. Create a deposit applying the prepayment to the invoice created in step 1. This will debit checking and credit AR. (Note \u2013 Steps 1 and 2 could be replaced with Step 1 in Method A)
\n<\/span><\/p>\n

3. On the job, create a negative charge. In the account code field, use the prepayment account.
\n<\/span><\/p>\n

4. When you ship the item, it will create an invoice for the amount minus the negative charge. This will debit AR and the prepayment account and credit Sales.
\n<\/span><\/p>\n

5. Upon receipt of payment, create a deposit. This will credit AR and debit checking.
\n<\/span><\/p>\n

\n\n\n<\/col>\n<\/col>\n<\/col>\n<\/col>\n<\/colgroup>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Step<\/span><\/td>\nAccount<\/span><\/td>\nDebit<\/span><\/td>\nCredit<\/span><\/td>\n<\/tr>\n
1<\/strong><\/span><\/td>\nA\/R<\/span><\/td>\n$100<\/span><\/td>\n<\/td>\n<\/tr>\n
1<\/strong><\/span><\/td>\nPrepayment<\/span><\/td>\n<\/td>\n$100<\/span><\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
2<\/strong><\/span><\/td>\nChecking<\/span><\/td>\n$100<\/span><\/td>\n<\/td>\n<\/tr>\n
2<\/strong><\/span><\/td>\nA\/R<\/span><\/td>\n<\/td>\n$100<\/span><\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
3<\/strong><\/span><\/td>\nA\/R<\/span><\/td>\n$900<\/span><\/td>\n<\/td>\n<\/tr>\n
3<\/strong><\/span><\/td>\nPrepayment<\/span><\/td>\n$100<\/span><\/td>\n<\/td>\n<\/tr>\n
3<\/strong><\/span><\/td>\nSales<\/span><\/td>\n<\/td>\n$1000<\/span><\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
4<\/strong><\/span><\/td>\nChecking<\/span><\/td>\n$900<\/span><\/td>\n<\/td>\n<\/tr>\n
4<\/strong><\/span><\/td>\nA\/R<\/span><\/td>\n<\/td>\n$900<\/span><\/td>\n<\/tr>\n
Notes: As the final invoice reflects the prepayment, if taxes are to be charged on this order, the use of this method may cause incorrect taxes to be charged as the system charges taxes on the invoice total AFTER the prepayment has been subtracted. <\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Processing Pre-payments in SMARTer Manager Method A: 1. Upon receipt of a prepayment, create a debit transaction in the checking account. Go to Accounting\/Checkbooks\/Checkbooks. Click on the Debits button and create a new debit. On the accounts distribution section, post … Continued<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"kt_blocks_editor_width":"","jetpack_post_was_ever_published":false,"jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":[]},"categories":[11],"tags":[16,72],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9f7Kr-1u","_links":{"self":[{"href":"https:\/\/www.smartermanager.com\/blog\/wp-json\/wp\/v2\/posts\/92"}],"collection":[{"href":"https:\/\/www.smartermanager.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.smartermanager.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.smartermanager.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.smartermanager.com\/blog\/wp-json\/wp\/v2\/comments?post=92"}],"version-history":[{"count":0,"href":"https:\/\/www.smartermanager.com\/blog\/wp-json\/wp\/v2\/posts\/92\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.smartermanager.com\/blog\/wp-json\/wp\/v2\/media?parent=92"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.smartermanager.com\/blog\/wp-json\/wp\/v2\/categories?post=92"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.smartermanager.com\/blog\/wp-json\/wp\/v2\/tags?post=92"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}