---
title: "Advance Payments & Advance Balance"
description: Take money in advance from a customer and apply it to invoices later.
url: "https://tecniforge.com/docs/vfile/vfile-contacts/advance-payments-advance-balance/"
updated: "2026-09-01"
category: vFile / Contacts
---

# Advance Payments & Advance Balance

## What is an advance payment?

An **advance payment** is money a customer gives you before (or without) a specific invoice. It is held as an **advance balance** on their account and can be applied to invoices later.

## Receiving an advance

1. Open the customer from [vfile.app/contacts](https://vfile.app/contacts) and go to the **Payments** tab, or use **Pay** from the contact list.
2. Enter the amount, payment method and date.
3. Save. The amount is added to the customer's **advance balance**.

## Applying an advance to invoices

When the customer buys, settle the invoice from their advance by choosing the **Advance** payment method. The advance balance reduces and the invoice is marked paid or partial.

## Worked example

A dealer, *Kamran*, pays money up front to reserve seed before the season.

1. Kamran gives you ₨200,000 in advance. On his Payments tab you record it — his **advance balance** becomes ₨200,000.
2. Two weeks later you sell him seed worth ₨150,000.
3. You settle that invoice using the **Advance** method. His advance drops to ₨50,000 and the invoice shows as Paid.
4. His ledger clearly shows the ₨200,000 in, ₨150,000 applied, and ₨50,000 still held for next time.

## What this affects

- **Advance balance** — receiving money adds to it; applying it to invoices reduces it.
- **Payment account** — the ₨200,000 received increases the account it went into.
- **Ledger** — the advance shows as a credit, and if a customer's account is in net credit, the [ledger](https://tecniforge.com/docs/vfile/vfile-payments-ledger/partner-ledger-format-4/) says the company will **pay** that balance back.
- Apply only as much advance as the customer actually paid — never more than the balance available.

## Frequently asked questions

**What is the difference between an advance and a normal payment?**
A normal payment settles a specific invoice. An advance is money taken with no invoice yet — it waits on the account until you apply it.

**Can I refund an advance the customer no longer needs?**
Yes, you can pay the unused advance back; it then leaves their advance balance.

**The customer's ledger says “Company will Pay” — what does that mean?**
It means they are in net credit — for example they hold more advance than they owe — so you owe them that amount.

## Related guides

- [Recording Payments](https://tecniforge.com/docs/vfile/vfile-payments-ledger/recording-payments/)
- [Aging Report](https://tecniforge.com/docs/vfile/vfile-payments-ledger/aging-report/)

---

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