Opening entry for a customer who paid an advance amount

1

How do I make an opening entry for a customer who paid an advance amount in the previous financial year? The advance amount needs to be offset against the current fiscal year’s SALES INVOICE entry. Can someone please guide me on how to pass the entry and mark the bill as paid?

Regards
Pritam

2

Hi,

You can create opening via journal entry as follows:

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Also, on the line you can select is advance as follows:

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You can set-off advance against Invoices via Payment Reconciliation.

Thanks,

Divyesh Mangroliya

3

Thank you very much for your support. In this case, if the customer paid the advance amount after deducting the TDS, what amount should be entered in the opening journal entry? Should it be the full invoice value? Because if we only enter the actual paid amount, it won’t fully clear the invoice when we set it off. What approach should be followed in this situation?

4

Hi,

For that you need to credit full amount including TDS to Customer and Debit TDS amount in TDS receivable account and debit net amount to special account.

Thanks,

Divyesh Mangroliya

5

thanks a lot divyesh!