Record the money on a receipt
From Sales open Receipts, then Receipt. Pick the customer, type the amount and account, and say what it is for in Notes. Do not apply it to any invoice: leave Applied amount empty, then press Save. The money enters the bank and the amount stays in the Unapplied column.
| Account | Debit | Credit |
|---|---|---|
| Bank | 5,000.00 | |
| Receivables (customer credit) | 5,000.00 |
A receipt calculates no VAT. VAT is charged when the invoice is issued. Ask your accountant how VAT on advances applies to your business.
Know where the credit shows
The amount shows as a credit on the Customer statement. The Aging report reads invoices only, so it is not reduced until you apply the money to one.
Apply it when the invoice is issued
After issuing the invoice, go back to Receipts, open the receipt and press Oldest first. The amount is applied to that customer's open invoices, oldest first. Their balance falls, and Unapplied drops to zero or to what is left.
The invoice screen has a Prepayments settled by this invoice section. It lists prepayment invoices, not receipts, so a message saying there are none is normal here.
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