Using Project Advance Payments

To set up and use advance payments for projects:

  1. On the Project Parameters form, define the general ledger account that will be used to record invoices generated from an advance payment invoice.

    If advance payment is received before an invoice is sent to the customer, the money is recorded as an open payment. After an advance payment invoice is generated, the money is moved to the advance payment account.

  2. Create a project with a WIP Relief Method of Revenue Recognition.

    See Creating a Project.

  3. Open the Revenue Milestones form and create a milestone for the project you just created. Select the Create Advance Payment Invoice field.
  4. Nominate the revenue milestone on theRevenue Milestone Nomination form.
    Note:  If you attempt to nominate a milestone that will cause the total advance payment deduction amount to exceed the total amount invoiced, an error displays and the milestone is not nominated.
  5. Post the revenue milestone on the Print/Post Project Revenue Milestones form. This action causes an invoice milestone to be created with the same settings as the revenue milestone. After posting the revenue milestone, the Projects form is updated with the advance payment information defined on the milestone.
  6. Create the advance payment on the Invoice Milestones form if one was not automatically generated from a revenue milestone. Enter the invoice information, then select the Create Advance Payment Invoice field.

  7. Nominate the invoice milestone on the Invoice Milestone Nomination form.

    Note:  If you attempt to nominate a milestone that will cause the total advance payment deduction amount to exceed the total amount invoiced, an error displays and the milestone is not nominated.
  8. To handle invoicing and additional milestones:
    1. Create A/R invoices on the Post Project Invoice Milestones form. If an A/R invoice is generated for a milestone marked as an advance payment invoice, the distribution uses the general ledger advance payment account defined on the Project Parameters form.
      • If an A/R invoice is generated for a milestone marked as an advance payment, the distribution should use the general ledger advance payment account defined on the Project Parameters form.
      • If an A/R invoice is generated for a milestone not marked as an advance payment, the invoice will be reduced by amount entered in the Advance Payment Deduction Amount field, and will use the Unbilled A/R account.
    2. When payment is received, post the advance payment transaction on the Invoice Posting form.
    3. As new milestones are created, use the Advance Payment Deduction Amount field to define how much of the advance payment to apply to each invoice. When entering an amount in the Advance Payment Deduction Amount field, the To be Deducted field on the Projects form is updated when you save the milestone.
    4. Check the Projects form for a summary of advance payment balances and invoice deductions.
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