Re: [SL] Handling prepayments

[Dr E. L. <el...@li...>]

They (pre-)pay into our bank account, and I make a GL entry debiting the
bank account, crediting the Pre-Payment account. Then I do a
Cash->Receipt for the client and apply the payment selecting not the
bank account but the Pre-Payment account from the Payment pull-down menu.

That's it.

The actual money has always been in the bank account, but until you
"pay" an invoice from Pre-Pay that money doesn't really belong to you
yet, ergo it is not Revenue but Liability.

And since we have about 15 Pre-Payers it's not really a major issue. I
have one for payments that I don't know which invoices they are for,
usually when I suspend services for delinquency this sorts itself out :-)-O.

greetings, el

on 2/13/07 8:21 AM Michael Hasse said the following:
> Good point on the taxes!
>     So to confirm I'm understanding, you've got a separate Liability
> account for each prepaying client?  And then as the funds are applied
> to invoices those amounts get moved over to the actual bank accounts
> on asset side of the balance sheet?  Are there two payment line items
> entered on each invoice then, one each for liability and asset?
>
>
> Thanks!
>
> Michael