Question

Advanced Customer Payments

  • 18 November 2021
  • 1 reply
  • 317 views
K
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Userlevel 6
Badge +8

Dear Sir/Madam,

 

I have a question regarding advance payments from customers. In order to secure company’s cash flow our company requests the customers for pre-payments. If customer agrees to make pre-payment/payment in advance we receives the payment on bank account. Question: how to handle prepayments in IFS properly and according to accounting rules?

 

We tried to use the proper transaction and book the pre-payment accordingly in our GL (screens added in below). We tested Customer Payment view not matching the payment with any specific invoice. We figured out this transaction has been booked using PP8 posting type and the payment was booked on 15xx account (credit). This way outstanding AR balance have been reduced. According to accounting GAAP customer prepayments should be booked on liability account and presented similar to AP in balance sheet. We found another posting type PP36 with defined fixed account 2420 where the transaction is going to be booked, but we don’t know which view/transaction in IFS is connected to that posting type. Question: what is transaction linked to posting type PP36?

 

Kind Regards,

Kalpa.

 

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1 reply

Shehan Almeida
Rank
Userlevel 7
Badge +17

Hi Kalpa,

 

If you want to have the PP36 transactions, you need to follow the below steps.

 

  1.  Raise a advance customer invoice from the customer order.
  2. Make a payment for that. This will credit the PP36. 
  3. Once you raise the finance customer invoice this will get revered and  booked against the IP (Actual customer account)

Hope this helps.

 

Shehan Almeida.

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