Payment on Account - What is payment on account?
Payment on account is any partial payment of an amount that is owed, either to you or by you, that is not matched to a specific invoice
Manage your other income from all sources easily with invoicing & accounting software like Debitoor. Try it free for 7 days.
If you receive a payment from a customer or send a payment to a supplier without making reference to a specific invoice this can be treated as a payment on account.
When payment on account occurs
Occasionally, payments are made for amounts due but do not come with a reference to a particular invoice or order, making it difficult to reconcile.
It is common when credit is used for acquiring goods or services, and then payments are made over the course of time in varying amounts. Purchases made using credit can also be considered purchases on account.
How to handle a payment on account
If you make a payment to a supplier that you cannot allocate at the time to invoices received, you can designate this as a "payment on account". Then at a later date you can fully match it with the invoice/invoices it relates to, or partially match it against an invoice.
Payments made by your customers to you can be treated in the same way.
Payment on account in Debitoor
When you receive income that cannot be matched right away, or is from a source that will not match to your invoice, it can be easily managed in the ‘Other Income’ section. This allows you to still keep track of the payments and for them to be included in your accounts.
You can enter details about the payment source, as well as upload any related documentation to keep track of your other income.