Re: [SL] Handling prepayments

[Michael H. <mh...@it...>]

Mkay, that makes sense, but if there's a GL debiting the bank  
account, how does the bank account get credited again?  (Maybe I  
should just try it and see what happens!  Nothing like the hands-on  
approach, eh?  :)


On Feb 13, 2007, at 10:35 AM, Dr Eberhard Lisse wrote:

> 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
>
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