How to add and use DEPOSIT or PROGRESS PAYMENT lines on a sales order

KB157

Overview

Sometimes it is necessary for customers to pay deposits or progress payments prior to you dispatching their goods or making their product. If the customer requires a tax invoice (as opposed to a pre-payment which is generally not taxable), then you can do this with a taxable deposit or progress payment line. You can add as many taxable deposit and progress payments lines as required.

Process

  1. Confirm that 'Accounts Receivable Setup > Preferences > Remove 0 quantity lines from Dispatches is Un-checked
  2. Create an item code called (e.g.) “DEPOSIT” or “PROGRESS PAYMENT”
    • This will be a non-stock item code, with GST, and will allocate to an income account of your choice (either income, or a prepayments liability account)
    • Ensure that the Setup tab of the item has the Allow this item to be over-dispatched box ticked
  3. On the sales order
    • Add the DEPOSIT or PROGRESS PAYMENT line
    • Add details of the deposit or progress payment to the item description
    • The quantity will be 0 (because once dispatched and returned, the net quantity of the deposit will be 0)
    • The value will be the amount of the deposit or progress payment
    • The total will be $0 because the quantity is zero - this is what you need
  4. Dispatch and invoice the deposit or progress payment line
    • The quantity will usually be 1 if you are invoicing the full deposit or progress payment amount
    • Once invoiced, this will create a tax invoice of the value you require for the deposit or progress payment amount

When you dispatch the real goods

  1. Create a dispatch
    • Because the deposit and progress payment lines has been "over dispatched", they should automatically appear with a negative - this is good
    • Add on all other items to be dispatched
  2. Create the invoice
    • The deposit and progress payment lines, being negative, will produce a credit equal to the deposit and progress payments that have been.

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Last edit: 06/12/21