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 #
- Open the customer from vfile.app/contacts and go to the Payments tab, or use Pay from the contact list.
- Enter the amount, payment method and date.
- 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.
- Kamran gives you ₨200,000 in advance. On his Payments tab you record it — his advance balance becomes ₨200,000.
- Two weeks later you sell him seed worth ₨150,000.
- You settle that invoice using the Advance method. His advance drops to ₨50,000 and the invoice shows as Paid.
- 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 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.