A payment on account is money you have paid a supplier, or received from a customer, that isn't matched to an invoice yet. Briefcase Ledger holds it as a credit against that contact. The credit shows on the Aged Creditors or Aged Debtors report until you allocate it to an invoice or refund it.

Use a payment on account when:

  • A bulk payment covers invoices you don't have yet.
  • You paid a deposit before the supplier sent an invoice.
  • You paid more than you owed.

Don't create a placeholder invoice to make a payment balance. You can only reclaim VAT once you hold a valid VAT invoice, and a placeholder is easy to count twice when the real invoice arrives.

Reconcile a bulk payment with missing invoices

In this example, Dunder Mifflin paid Schrute Farms £2,083.60 but only has invoices for £1,083.60.

  1. Open the bank account, find the payment and choose Match.
  2. Untick Filter by matching amount, then search for the supplier.
  3. Tick the invoices you have. Remaining shows the amount they don't cover.
  4. Tick Keep £1,000.00 on account as a supplier credit and choose Overpayment.
  5. Choose Reconcile.
The Match window with two Schrute Farms invoices ticked, £1,000.00 remaining, Keep on account ticked and Overpayment selectedThe Match window with two Schrute Farms invoices ticked, £1,000.00 remaining, Keep on account ticked and Overpayment selected
The two invoices on hand are matched and the remaining £1,000.00 is kept on account. Example details shown.

If you don't know which invoices are missing, ask the supplier for a statement. It lists every invoice the payment covered.

Overpayment or Advance?

  • Overpayment: the payment covers invoices you haven't received yet, or you paid more than you owed. No VAT is recorded. You claim the VAT when you post the invoice.
  • Advance: you paid before the supplier delivered anything, such as a deposit. VAT is recorded at the rate you choose, so choose No VAT unless the supplier has given you a VAT invoice for the deposit.

Allocate the credit when the invoice arrives

  1. Upload the invoice and approve it as usual.
  2. Go to Reports → Aged Creditors and open the supplier.
  3. Choose Allocate next to Payment on account.
  4. Pick the invoice, check the amount and date, then choose Allocate.
Aged Creditors with Schrute Farms opened, showing invoice SFPM-1072 for £1,000.00 and a £1,000.00 payment on account with an Allocate buttonAged Creditors with Schrute Farms opened, showing invoice SFPM-1072 for £1,000.00 and a £1,000.00 payment on account with an Allocate button
The invoice that arrived later and the payment on account sit under the same supplier. Example details shown.
The Allocate payment on account window allocating £1,000.00 to invoice SFPM-1072The Allocate payment on account window allocating £1,000.00 to invoice SFPM-1072
Allocating the £1,000.00 credit to the invoice. Example details shown.

The invoice is settled and the credit goes down by the amount you allocate. If the credit covers several invoices, allocate it to each one in turn. You can also allocate credits from Working Papers → Creditors & Debtors Review.

Record a deposit paid before the invoice

  1. Open the payment and choose Match.
  2. Under Or record a supplier advance, choose the supplier.
  3. Choose No VAT, unless the supplier has given you a VAT invoice for the deposit.
  4. Choose Record advance.
The Match window for a £1,200.00 payment with Lackawanna Print Co Ltd and No VAT selected under Or record a supplier advanceThe Match window for a £1,200.00 payment with Lackawanna Print Co Ltd and No VAT selected under Or record a supplier advance
A £1,200.00 deposit recorded as a supplier advance with no VAT. Example details shown.

When the final invoice arrives, allocate the advance to it from Aged Creditors in the same way.

Refund a credit

If the supplier pays the money back, match the refund to the credit:

  1. Open the money received and choose Match.
  2. Under Or refund a supplier credit, choose Refund next to the credit.
The Match window for £1,200.00 received, listing open supplier credits with a Refund button next to the £1,200.00 advanceThe Match window for £1,200.00 received, listing open supplier credits with a Refund button next to the £1,200.00 advance
The supplier refunded the £1,200.00 deposit, so the advance is refunded in full. Example details shown.

The refund must match the credit remaining exactly. Refund is greyed out for credits of a different amount.

Customers

Money you receive works the same way. When a customer pays more than their invoices, keep the remainder on account as a customer credit. Record a customer advance for a deposit, and refund a customer credit when you pay money back. Customer credits show on Aged Debtors.

Before you close the period

Open credits show on Aged Creditors, Aged Debtors and in Working Papers → Creditors & Debtors Review. Chase any missing invoices before you close the period.