In the payment procedures, a control of paid invoices takes place to decide if the payment refers to an advance invoice. When coding the payment the account for suspended VAT is charged and the account for output VAT is credited. This is made in parallel with the usual coding of accounts receivable and bank account.
Sample of the Incoming Payments procedure.
The Coding Window.
If the payment regards an advance invoice, the system automatically reverses the entry of suspended output VAT to output VAT. The account 2610 above is linked to the VAT report.
Additional coding can be done if the system setting Use separate accounts for invoiced and paid advances is activated. Then the system controls which sales accounts that are used for the invoice (via accounting ID). The offset account will be the standard account for paid advance invoices. The records of Cost centers/cost units/projects, if any, shall be removed and be entered to the account for paid advances.
Below you will find an example of this:
Coding of advance invoice.
Account 2610 (VAT) and 2421 (turnover) are linked to the VAT report.
When a delivery invoice and subsequent invoice are paid, no coding of VAT and turnover takes places.