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Prepayments (Advance Payments) from Customers appear on Income Statement

iTeesiTees Member Posts: 2

Why are (Advance Payments) from Customers appear on my Income Statement?

I went to Invoices page and select Record a payment next to customer's invoice. For the Payment method, I choose Other, and for the Payment account, I choose the account "Customer Pre-payments" (which is a liability account that I made)

When I went to reports and generate report for Income Statement. I dont know why it appears as Sales?

What I wanted is i wanted to hide it from my Income Statement

edited February 26, 2020 in Accounting Technical Support

Comments

  • JordanDJordanD Member Posts: 515 ✭✭✭

    Hey @iTees! The customer pre-payment account should be used in cases where the customer has paid you prior to an invoice being created. This means that you would have received these funds prior to delivering a service, and in which case, the account and the transaction should be included on your reporting because have already received these funds. Are you able to explain why you do not want those funds to show on your reporting? I may be able to suggest a different workflow that might be more applicable once I understand the "why" behind this.

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