In the ERP, cash advances are a very useful function when managing an organization, and it should ensure that all criteria and requirements are complied with in its use. From this feature, you can include cash advances in the sales and purchases documents and deduct cash advances in Current Account.

Remarks on VAT

Legally, when performing cash advances, the VAT is required when the company receives the corresponding value. When including the cash advances in a document, the app will calculate the VAT value on the total deducted value, considering that the VAT regarding the cash advance has been previously settled.

Example:

Let's consider that a specific customer has performed an order of 600€ (VAT included at 20%) and, in that moment, ha has made a cash advance of 150€.

Cash Advance Value= 150€ (IVA = 25€)

When the customer retrieved the order, the invoice presented the following values:

Goods: 500€
VAT: 75€
Others: -125€
Total: 450€

These values match the case of a series without included VAT. In the case of a series with included VAT, the cash advance value would be 150€ (part "Others"), and the Total is the same in both situations.

Handling advance payments

When handling advance payments, the following criteria must be followed:

The advanced payments must be handled with VAT;
The advanced payments are registered with an invoice;
The VAT clearing must be done with a credit note (as stipulated by order 8632/2014) and this clearing can only be done after issuing the final invoice;
Not cleared advance payments must be visible at any moment;
SAF-T must be correctly filled in;
The account statement (for current accounts) must provide evidence of all client records;
Accounting and the correct account must be consistent at all times;

PRIMAVERA suggests the following procedures:

Implementation

PRIMAVERA suggests the following implementation for the Portuguese market:

Creating/changing configurations for the following sales documents;
FAA - Advance payment invoice:
- Integrate into current accounts in accounting;
- Communicate SAF-T;
- Active connection to banks;
- With link to accounting;
- Subject to conversion;
- Payable document;
- Tax document type = FT;
FA - Client invoice with the following characteristics:
- Integrate into current accounts directly;
- Communicate SAF-T;
- No connection to banks;
- With link to accounting;
- Receivable document;
- Tax document type: FT;
- RGA - Advance payment clearing with the following characteristics:
- Integrate into current accounts in accounting;
- Communicate SAF-T;
- No connection to banks;
- Link to banks;
- Control quantities at source;
- Payable document;
- Type
- Tax document type = NC;
Changing customer account(s) in accounting (211*) to integrate into current accounts as a normal open item type of account/state;
Changing customer advance payments accounts in accounting (218*) to integrate into current accounts as an advance payment type of account/state;
Changing receipt configuration (RE) to include the advance payment type of account/state.

Process Flow

The process flow will be:

Creating the advance payment invoice (FAA);
Creating the advance payment invoice (FA);
Advance payment clearing (RGA) - this document is created by copying lines from the FAA;
Settlement (RE).

We would like to highlight that:

The FAA must integrate into current accounts in accounting because VAT is deducted from this value. For example, this means that if there is an advance payment invoice of 1000 € + VAT, its accounting will be as follows:
218x credit of €1000
Advance payment VAT credit of €230
Bank debit of €1230.
The RGA also integrates into current accounts in accounting, and must post two movements to current accounts. This means that to clear an original advance payment invoice with the referred values accounting will be as follows:
218x debit of €1000
Clearing VAT debit of €230
211x account credit of €1230.
The (RE) Receipt must settle three documents with four open items in current accounts: advance payments invoice, final invoice and clearing (that generates two open items). One of the open items of the clearing completely cancels the advance payments invoice, the other lowers the advance payment value in the final invoice;
Using the line copy method with quantities control allows you to ensure that clearing does not exceed the original value, as long as the user does not change the monetary values (unit price, discounts, etc.). To support partial advance payments you must change the quantity, not the unit price.

This solution requires the accounting module.

Deduct cash advances for entities

To deduct a cash advance in current account for a specific entity (Customer or Supplier, whether Sales or Purchases), follow these steps:

Access [Marketing & Sales / Purchases] | [Sales / Purchases] | Documents;
Select the document type Invoice;
Specify the entity: If it contains advance payments in current account, a message will be presented with this warning;
Access the Advance Payments in Current Account context operation;
On the presented window, it is possible to view on the column "Open Item" the open items in Cash Management for that advance payment. In turn, the column "Value" allows to insert the cash advance amount (that can be total or partial);
Click Confirm;
Check if a new row is presented on the sales editor with the amount inserted on the "Value" column;
Finally, click Save.

If the total open item value in sales is negative, you cannot perform a cash advance in current account. This operation is not possible because despite the document nature being payment, the total document is negative, and it has the properties of a receivable document and not of a payable document.

Deduct advance payments in current account

To deduct an advance payment in current account for a specific entity, follow these steps:

Access Marketing & Sales | Sales | Documents;
Access the Advance Payments in Current Account context operation;
Select the advance payments to be included on the document;
Click Confirm.

Perform advance payments in current account

To perform an advance payment in current account, follow these steps:

Access [Marketing & Sales / Purchases / Finance] | Payables and Receivables | Documents;
Select the customer;
Select the document of the advance payment type;
Specify the advance payment value;
Click Save.

If you wish to perform an advance payment in account with no link to current accounts, you must use the context option Advance Payments.

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