Finance User Manual ENG -> 3. Payments -> 3.4 Specific Payments and Journal Entries -> LUFI-30405 Down Payments
LUFI-30405 Down Payments
LU Introduction
A down payment is a cash advance to a supplier made at the time of ordering goods when the purchase is not yet invoiced.
In UniField, a down payment is recorded in a bank, cash or cheque register to ensure the money out impacts the register’s balance. It is recorded under the account {Advances done to third parties} with a mandatory third party. This icon helps user link the approved Purchase Order to the down payment recorded in the register. It appears once you saved the register line.
The down payment is displayed in the Purchase Order {Invoices} tab once the down payment accounting line is hard-posted in the register. At this point there is no supplier invoice because no goods have been received yet.
After the goods are received, a supplier invoice is automatically created in {Draft} in UniField for the total amount of the goods purchased. It is then possible to see the down payment on the {Down Payments} tab in the draft supplier invoice to be validated. The down payment is only displayed on the tab if the down payment entry is hard-posted.
{Supplier invoice} Form view
When an authorized user validates the invoice, the supplier invoice takes into account the part of the payment that has already been done. The user finds this information in the {Payments} tab in the supplier invoice form additionally to the {Down payments} tab. The validated invoice shows a residual amount to pay based on what was already disbursed as down payment.
{Payments} tab showing a down payment in a supplier invoice Form view
{Down Payments} tab showing a down payment in a supplier invoice Form view
Residual amount to pay displayed in a supplier invoice
Accounts move related to down payment and supplier invoice validation
- When the down payment is delivered, the account {Advances done to third parties} is debited and the account {10100 – cash on hand} is credited in the liquidity journal.
- When the invoice is validated, the expense account is debited and Trade Payables account credited for the total cost in the purchase journal.
Automatic account reconciliation: In the liquidity journal, the advances to third parties account are reconciled (M1-9) and the Trade Payables account is partially reconciled (M1-10) showing a residual amount to pay.
Note! These entries are not reflected in the register; therefore a gap of sequence can be expected when creating a new register line. However, these entries can be followed up on the Full Report.
Invoice to import showing a residual amount
The final payment is done by importing the supplier invoice into the register.
Once the payment is done and hard-posted in the register, UniField automatically creates a new reconciliation reference.
This is what you will see in journal items:
Journal items when the imported invoice register line was hard-posted. A new reconciliation reference was created.
How to Record a Down Payment:
(Same procedure applies to record a Down Payment in a cash, cheque or bank register)
Go to: Accounting/Registers:
- Select the register used to pay the down payment.
- Click on {New} to create a register line.
- Complete the line. In the {Account} field, select the account {Advances done to third parties}. Select the supplier in the {partner} field
- Save the line.
⮡ The line is saved in {Draft}. The icon appears.
- Click on the icon to link the down payment to the purchase order.
⮡ A {Down payment} wizard appears
A {Down payment} wizard appears
- In the {Purchase Order} field, select the relevant purchase order to link it with the advance and validate it. Remember, no supplier invoice will exist because goods have not been received yet. If you do not see your purchase order, confirm you are in the register corresponding to the correct currency and you have selected the correct supplier. Also, check the PO lines status; only POs lines in status {Confirmed} can be linked to a Down Payment and the total amount of any confirmed PO lines minus any validated Supplier Invoices for the same PO cannot be exceeded.
- Back to the register line, save it.
⮡ The down payment is booked in your register. Only after the down payment is hard- posted will the down payment be recorded in the associated purchase order in the {Invoices} tab.
Down payment displayed in a purchase order
