Prepayment query

Accounting
1

I have sent an invoice to a customer for 2hrs credit which I’ve now taken payment for, but just wondering what the best plan is.

  1. Add the payment on to the account and then keep the invoice open and pay it off as the work is undertaken?
  2. Pay off the invoice for the credit taken and then keep a mental note not to charge for the additional work?

I would say option 1 is the way to go?

Kind regards

2

If you have invoiced for the work undertaken so far then, ideally, I would recommend paying off the invoice as it will otherwise become overdue. Unless you have taken manual action to prevent it this will cause reminders to be sent automatically, also if you send the customer a statement it will show as unpaid (statements don’t show money held on account).

As the customer, presumably, has a link to the invoice there is a risk that they will go back and check. Most don’t but there are one or two who will.

1 Like
3

Yeah that’s a fair point I guess. I’ll close it off for now and make a note that they’ve paid up in advance for the work.

4

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