Processing Prepayment Invoices

In some countries, prepayments are subject to tax reporting requirements. When a company receives a prepayment from a customer, it is typically required to report taxes on that prepayment in its tax return for the period in which the prepayment was received. This means that the company must account for the prepayment tax as part of its overall tax obligations.

Additionally, in certain countries,a company must issue a document to a client (prior to issuing an invoice) upon which a prepayment for the ordered items will be made.

To help companies meet these requirements, MYOB Acumatica offers the prepayment invoice functionality. With this functionality, you can create prepayment invoices for the items and services ordered. The system calculates taxes on each prepayment invoice. Once the prepayment invoice is paid, your company can report the taxes in the reporting period in which the prepayment was received. Later, you create an AR invoice for the items or services provided, and the prepayment invoice can be used as a payment for the sales invoice.

In this chapter, you will learn how to create and process prepayment invoices, and you will explore the GL transactions created in the system by this process.