Issuance of advance invoice and issuance of final payment invoice with deduction of advance

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ISSUE INVOICE FOR ADVANCEMENT

An advance payment is a payment made before the transaction is completed (ie before the goods are delivered or the service is performed).

Usually, the advance payment is made on the basis of a contract, annex or proforma invoice. The existence of a contract does not preclude the issuance of a pro forma invoice.

The advance payment can be for a fraction of the total transaction amount, but it can also be for 100% of the total transaction amount. In practice, 100% payment received before the transaction is completed is also essentially an advance payment.

The reason can be, for example: “50% advance on contract”

IMPORTANT! In the event that the customer has made a payment based on a sent proforma invoice, the original invoice must be issued within 5 days of receiving the money to the bank account.

ISSUE OF FINAL INVOICE WITH DEDUCTION OF ADVANCEMENT

• Issuance of a final invoice with an advance deduction of up to 99.99%

If a transaction for which an advance payment has been made is subsequently realized, a final invoice is issued. In this invoice, the total value and subject of the transaction is described, and the advance received is deducted on a separate line.The final invoice minus the advance should look like this:

• first line – the subject of the transaction is described with the entire contract value
• second line – describe the reason from the invoice for the advance, the invoice number and the date to which the advance refers; the unit value is the value of the advance with a negative value.

It is possible that there will be several advances under the contract before the transaction is finalized, they can be described on the third, fourth or fifth line.

In this way, we show the value of the contract transaction, the value of the advance (received) already received, and it is clear to the client what the remaining amount is due as the final payment.

• Issue of final invoice with deduction of 100% advance

If the advance payment was 100% for which an invoice was issued. We issue a final invoice with the first line the entire value under the contract and the second line the value of the advance. We don’t have to worry in case the final value (payment amount) of the invoice is 0.

By issuing the invoice in this way, we document (apart from the handover protocol) the completion of the transaction.

The final invoice minus the 100% down payment should look like this:

The GDPR allows not to issue a final invoice, but in our opinion, issuing a final invoice with a final payment amount of 0 is a better option.

If the transaction does not go through and the advance payment is returned, the supplier must issue a Credit Notice.

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