Use Journal Entry as advanced payment against Invoice

vrms · July 19, 2020, 12:05pm

I have some Journal entries in my accounts which (realized this later) need to have Purchase invoices against them, so the Accounts Payable report for the suppliers who actually received money (and which are linked to those Journal entries) can be balanced.

Now to do this u need the ADVANCE PAYMENT in the Invoice created in retrospect. But the system won’t allow manually add any line to the Purchase Invoice Advance Child table manually.

The reason is that all field in the Child Table DocType are marked read-only. As you are not allowed to change that via customize Form you can regard the statement "it is impossible to use a Journal Entry as an Advance Payment" to be TRUE I guess.

Can anyone explain to me what is the business logic being this restriction? If there is none, or not strong arguments for this I’d challenge this default behaviour to be changed.

I am aware of the workarounds (cancelling the JV, submit Invoice, Amend the JV with reference to that invoice and re-submit). It is a general question.

Sirjames · July 19, 2020, 1:24pm

Hi,

You could try capturing the Purchase Invoices for the supplier concerned, then use the Match Payments with Invoices to allocate the payment against the invoices.

vrms · July 19, 2020, 2:20pm

thx for the feedback

Can you describe the “Match payment against invoices” a bit more concrete. I am not aware of any tool or method with such or similar name
do you believe this would work with Journal Entries and not only Payment Entries?

Sirjames · July 19, 2020, 3:31pm

The Match Payments with Invoices feature is in Accounting module. Click on it to open the screen:

Select the company.
Select Customer as Party Type.
Select the particular customer.
The Receivables control account will be displayed in the Receiable / Payable Account field.
Selec the Bank account (This is memorandum actually. No entries will be made in the accounts).

Click the GET UNRECONCILED ENTRIES button. System will display all payments you have entered in the Payment table and invoices in the Invoices table.

In the Payments table, click the Invoice Number field. It will drop down. Select the particular invoice you wish to allocate against the payment. System will display the amount (or balance) of the invoice in the Allocated amount field.

Click Reconcile button to knock out the invoice.
Repeat the process for the next invoice, if you have more invoices to allocate against such payments.

vrms · July 19, 2020, 5:18pm

thks, will look into Payment Reconciliation then. Looks promising.

kennethsequeira · July 19, 2020, 8:13pm

There is already an option called Get Advances Paid which you can use to allocate payments made earlier against an invoice.

https://docs.erpnext.com/docs/user/manual/en/accounts/advance-payment-entry#

Or as suggested, you have payment reconciliation.

vrms · July 20, 2020, 7:22pm

I am aware of that. Actually that is my starting point of this Topic.

The question is whether there is any strong business intelligence or best practice reason for Journal Entries not be allowed as Advance payments (you practically can not chose them)

kennethsequeira · July 20, 2020, 7:32pm

Was the Journal Entry marked as Advance?

I understand that the system will only fetch a JV which is marked as advance.

github.com

frappe/erpnext/blob/3dee5273d6111ceb61f9a8285d8f58a16e5ec846/erpnext/controllers/accounts_controller.py#L1006


      
          	journal_entries = frappe.db.sql("""
          		select
          			"Journal Entry" as reference_type, t1.name as reference_name,
          			t1.remark as remarks, t2.{0} as amount, t2.name as reference_row,
          			t2.reference_name as against_order
          		from
          			`tabJournal Entry` t1, `tabJournal Entry Account` t2
          		where
          			t1.name = t2.parent and t2.account = %s
          			and t2.party_type = %s and t2.party = %s
          			and t2.is_advance = 'Yes' and t1.docstatus = 1
          			and {1} > 0 {2}
          		order by t1.posting_date""".format(amount_field, dr_or_cr, reference_condition),
          									[party_account, party_type, party] + order_list, as_dict=1)
          
          	return list(journal_entries)
          
          
          def get_advance_payment_entries(party_type, party, party_account, order_doctype,
          		order_list=None, include_unallocated=True, against_all_orders=False, limit=None):
          	party_account_field = "paid_from" if party_type == "Customer" else "paid_to"

vrms · July 21, 2020, 10:36am

I see, that may be the point then.

Can you explain the business logic behind making it necessarry to require an “is advance” checkbox to be set to TRUE in the Journal entry if you want to use it as advance payment?

Francisco_Buendia · July 22, 2020, 5:41pm

Similar happens at Sales

tonto · July 22, 2020, 7:11pm

Slightly different case, but probably similar cause. Prepaid a supplier for items not fully shipped so have an unapplied balance with that supplier. Supplier sent payment for excess received. ERPnext payment entry will not allow applying the payment entry to the matching balance in supplier account.

Matching a payment with a payment sounds strange, but should work. Not sure what to do know as if a Purchase Invoice is created as recommended the supplier money return will be applied to it and the overpayment with the supplier will continue. Only option we see is creating 2 Purchase Invoice, which offset so that each payment can be applied to the PI and PI credit. Seems like a lot of unnecessary transactions to do a match.

Sirjames · July 23, 2020, 7:50am

True. This happens A LOT in Nigeria. The parties may not always reconcile the accounts via Debit/Credit Notes. A lot of times, they prefer refunds or partial refunds.