Allocating advance payment and settlement

When you want to allocate an advance payment towards an account sale, follow the below this step:

On the Advance Payment Allocations page, in the Amount to Apply field, specify the amount that should be used to offset the outstanding balance or reduce the amount owed for the transaction.

The amount should be equal to or less than the remaining balance. Otherwise, an error will occur while entering the amount.

After confirming the allocation of the amount, the Account Sale page's lower section displays the updated advance payment amount in the Allocated Advance Payment Amount (LCY) and the Allocated Advance Payment Amount (USD) fields.

The exchange rate used to calculate the Allocated Advance Payment Amount (LCY) originates from the purchase order of this account sale. You can then close the Account Sale page and navigate back to the Settlement page to post the finalized settlement. For more information, see Post a Settlement.

Application of the advance payment credit memo

When you register a settlement that has an allocated advance payment, the system creates a purchase credit memo for the advance payment in addition to the settlement purchase invoice. When you post the settlement purchase invoice, the system applies this credit memo to the posted invoice automatically. In the credit memo, the Applies-to Doc. Type field is set to Invoice and the Applies-to Doc. No. field is set to the number of the posted settlement invoice.

The credit memo is applied automatically only when exactly one advance payment credit memo exists for the settlement, the pay-to vendor, and the currency of the posted settlement invoice, and when the Applies-to Doc. Type, Applies-to Doc. No., and Applies-to ID fields of the credit memo are still empty. If several credit memos match, or if an application has already been entered, the existing values are kept and you apply the credit memo manually. In a posting preview, no application is written.