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What is the best way to handle prepayments? For example, if a customer pays $500 as a prepayment, and later the actual bill comes to $50, what is the best way to process this in GP?
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Enter a negative cash receipt for the overpayment and cut them a payables check to refund.
When you enter an invoice for a customer through the Sales Transaction Entry, the following entries are made;
Account Debit Credit
Accounts Receivables 50
Sales 50
When a cash receipt is entered, the following entries will be made;
Account Debit Credit
Accounts Receivables 50
Cash 50
Although, Dynamics if the customer is making a deposit or payment, you can use the Amount Received field to indicate that the customer is liable to pay the invoice amount minus the amount received (prepayment)
If a prepayment is entered, the following entries will be made;
Account Debit Credit
Accounts Receivables 40
Cash 10
Sales 50
Although, in your case, the customer is making a deposit of 500 as a prepayment while the actual invoice amount is 50. In this case, the AR account will be credited by 450
Account Debit Credit
Accounts Receivables 450
Cash 500
Sales 50
You can use Amount Received field in the Sales Transction Entry Window to enter a prepayment.
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