Advance installments

For regular sales orders, you invoice the business partner for delivered goods. The invoice amount is posted to the control account for sales invoices. LN calculates and posts the tax amount when you generate the sales invoice.

However, long-term projects such as the building of a ship are often paid in installments. For sales installments, LN creates an invoice for each installment line.

If you request advance payment of the installments from the business partner before you deliver the goods, you can post the advance invoice to a separate control account for advance installment invoices. For each financial business partner group, you can define separate control accounts for advance installment invoices per sales type.

To calculate and register the tax on advance installments when the invoice is paid, use a tax code of the On Payments tax type for the advance installment invoice.

In addition, to distinguish invoiced advance installments and paid advance installments for reporting purposes, you can map and post invoiced advance installments and paid advance installments to separate ledger accounts. For more information, refer to Separate ledger accounts for advance installments.

In the Control Account (Advance Invoice/Payment Request) field of the Control Accounts by Business Parter Group (tfacr0515m000) session, you can select the control account for advance invoices. If you post advance installment invoices in Invoicing, LN posts the invoices to this account.

The control accounts for advance invoices is included in the Open Entries details. LN uses the control accounts for the advance installment invoice and all subsequent transactions, such as receipts and currency differences.

When the advance installment invoice is paid in Cash Management, written off, factored, or set to Doubtful Invoices, the control account is reversed.

If you change the sales type of the business partner, the control account changes. For subsequent transactions, LN uses the new control account. However, if you make the invoice Doubtful, the control account does not change.