Prepayment Accounting Entries

   The system generates accounting entries for prepayment invoices as below,

1. (Voucher) PV (Prepayment Invoice)                                                            Nature of Account

                 Employee Advances                             Dr                                       ASSET

                 Staff Control                                                               Cr                  LIABILITY

2. Payment

                  Staff Control                                         Dr                                       LIABILITY

    Cash (Bank)                                                               Cr               ASSET

3. Settlement (Invoice is raised for Expense and prepayment is applied)

                   Expense                                               Dr                                       EXPENSE

                   Employee Advances                                                Cr                   ASSET 

 

As per client requirement, they want the entries to be as follows:

1. (Voucher) PV (Prepayment Invoice)

                 Employee Advances Suspense           Dr                                        ASSET

                 Staff Control                                                               Cr                  LIABILITY

2. Payment (Automatic once Payment match is made)

                 Staff Control                                         Dr                                        LIABILITY

  Cash (Bank)                                                               Cr                 ASSET 

 Employee Advances                             Dr                                       ASSET

Employee Advances Suspense                               Cr                     ASSET