Applying a previously paid advance in "Trade with Invoicing": automatic and manual offsetting of prepayments

The «Trading with Invoice Issuance» mode in Torgsoft is designed for wholesale trade, warehouse shipments, bank transfer payments, and processing online store orders. Its main advantage is that it separates the sales process into distinct stages: issuing an invoice, accepting an advance payment, shipping goods using an outgoing invoice, and completing final settlements. How does the software account for previously received payments when issuing an outgoing invoice? Why might an outgoing invoice appear unpaid even when the customer has funds available on their account? When are advance payments applied automatically, and when is manual allocation required? And how can advance payments and final settlements be correctly fiscalized through a PECR?

1. Basic Concepts and Principles of Advance Payment Accounting in Torgsoft

For transparent financial and inventory accounting, it is important to distinguish between the system's basic terms:

• Trading with Invoice Issuance (TII) — a special accounting mode in Torgsoft (Document — Trading with Invoice Issuance menu) that allows users to issue quotations and invoices, record advance payments, reserve goods, and generate outgoing invoices.

• Advance Payment (Invoice Prepayment) — money received from a customer (in cash or by bank transfer) before the goods are physically shipped from the warehouse.

• Advance Payment Allocation — a financial operation that links a previously received advance payment to an outgoing invoice, reducing or fully settling the customer's debt for shipped goods.

In Torgsoft, the monetary balance for invoices and outgoing invoices is calculated in the currency of the issued invoice. When a customer pays an invoice, the payment is recorded on the «Invoice Prepayment» tab. Until an outgoing invoice is generated, these funds are treated as an unallocated customer advance payment.

After an outgoing invoice is created, the goods are deducted from warehouse stock, and the resulting debt must be settled using the available advance payment.

2. Automatic Advance Payment Allocation When Creating an Outgoing Invoice

Torgsoft is designed to minimize repetitive manual tasks for operators. In most standard scenarios, advance payments are allocated automatically.

Automatic Allocation Procedure:

1. Recording an Advance Payment. The customer pays the invoice in full or in part (for example, through a bank statement, payment terminal, or cash register). The payment is recorded in the lower table on the «Invoice Prepayment» tab.

2. Creating an Outgoing Invoice. On the «Invoice» tab, the manager clicks «Create Outgoing Invoice» or uses the «Create Invoice and Pay It» action.

3. Automatic Payment Allocation. If an advance payment is available for the invoice or customer when the outgoing invoice is created, Torgsoft automatically allocates the available funds to the new outgoing invoice:

•    Full Advance Payment (100%). If the advance payment equals the outgoing invoice amount, the invoice is immediately created with the status «Fully Paid», and the outstanding balance is zero.

•    Partial Advance Payment. If the advance payment is less than the outgoing invoice amount, the software applies the entire available advance, reduces the outstanding balance accordingly, and opens a window for entering an additional payment for the remaining amount. If the user cancels the additional payment, the outgoing invoice is still created but remains partially paid for the amount of the automatically allocated advance.

•    Overpayment (Advance Exceeds Shipment Amount). If the advance payment exceeds the amount due on the outgoing invoice (for example, when goods are shipped in several batches), Torgsoft allocates only the amount required to pay the outgoing invoice in full. The remaining advance payment stays associated with the invoice for future shipments.

3. Manual Advance Payment Allocation: Applying Payments Against Prepayments

Businesses may encounter situations where automatic allocation did not occur or payment links were canceled (for example, after editing documents or reversing previous transactions). Torgsoft provides dedicated tools for manually allocating advance payments in such cases.

This function is used to settle an outstanding outgoing invoice using an available customer advance payment or overpayment recorded in the balance.

Step-by-step instructions:

1. Open «Trading with Invoice Issuance» and select the «Outgoing Invoice» tab.

2. In the upper table, select the outgoing invoice with an outstanding balance.

3. Click «Pay Outgoing Invoice Using Prepayment».

4. The system checks whether the customer has an available advance payment (taking the partner balance into account) and opens a dialog box that automatically suggests an amount to allocate (not exceeding either the outstanding invoice balance or the available advance payment).

5. After the operation is confirmed, balancing financial documents are created, the outstanding balance on the outgoing invoice is reduced or fully settled, and the customer's available advance payment is reduced accordingly.

If several advance payments have been received for an invoice and several outgoing invoices have been issued (for partial shipments), use the «Allocate Prepayment» action:

1. Open the «Invoice Prepayment» tab.

2. Click «Allocate Prepayment».

3. The software automatically analyzes all unpaid outgoing invoices associated with the original invoice and distributes the unallocated advance payment among them in chronological order, from the earliest outgoing invoice to the latest.

Answers to Frequently Asked Questions from Business Owners

A combined payment settlement is used. When the outgoing invoice is created (or when the «Create Invoice and Pay It» action is selected), Torgsoft automatically applies the entire available advance payment. The software then opens the standard payment window for the remaining amount, where you can choose the additional payment method (cash, bank account, or payment terminal). If the customer does not pay the balance immediately, the payment window can be closed — the outgoing invoice will remain partially paid for the advance amount, while the remainder will be recorded as the customer's outstanding debt.

Torgsoft provides a «Partial Shipment» mode for this purpose. When the first outgoing invoice is created for part of the goods, Torgsoft allocates the advance payment amount required to cover that invoice in full. The remaining advance payment stays available on the «Invoice Prepayment» tab. When the second outgoing invoice is created, the remaining advance is automatically allocated to it. If automatic allocation was skipped, simply click «Allocate Prepayment» on the Invoice Prepayment tab.

This situation occurs in two cases:

1. The customer's payment was received through a bank statement or payment terminal as an «Unidentified Payment» and has not yet been linked to a specific invoice.

2. The outgoing invoice was created before the payments were recorded, or the payment links were manually canceled.

How to Fix It:

• If the payment was received into a bank account, open the «Customer Payments» tab — «Unidentified Payments», select the payment, and click «Link Payment to Invoice». The funds will then be recorded as an advance payment against the invoice and allocated to the outgoing invoice.

• If the funds are already recorded as an invoice prepayment but are not reflected in the outgoing invoice, select the invoice on the «Outgoing Invoice» tab and click «Pay Outgoing Invoice Using Prepayment».

Fiscalization of advance payments and final settlements depends on the company's chosen accounting policy and the settings under Settings — Parameters — Receipt:

1. Advance Payment Fiscalization Scheme (Two-Stage):

•    When accepting an advance payment, the fiscal receipt printing option is selected on the «Invoice» tab (or the prepayments tab). The PECR prints an advance payment receipt in which the quantity of goods is calculated proportionally to the ratio of the advance amount to the total invoice amount, and the prefix «Prepayment for...» is added to the product name.

•    During the final shipment and additional payment against the outgoing invoice, the PECR generates a fiscal receipt for the remaining amount.

2. Scheme Without Advance Payment Fiscalization (Single-Stage):

•    Enable «Do Not Print Prepayment Receipts» in the receipt settings.

•    The advance payment is accepted and recorded in the software without printing a fiscal receipt. When all goods under the outgoing invoice are shipped, a single final fiscal receipt is printed showing the complete list of goods and the full amount, with the advance payment recorded as previously paid.

• If No Outgoing Invoice Has Been Created Yet. The «Refund Prepayment» action is available on the «Invoice» tab. The software opens the refund form, automatically enters the advance payment amount, and generates a cash disbursement order or a refund to the customer's bank account.

• If the Goods Have Already Been Shipped Under an Outgoing Invoice. The software will not allow the advance payment to be refunded directly from the original invoice. First, a «Return» document must be processed on the «Returns» tab for the corresponding outgoing invoice. Once the goods return has been recorded, the customer's goods and cash balance is adjusted, and any remaining funds are refunded through the cash register or bank account.

Summary and Recommendations

Proper advance payment accounting in Torgsoft ensures accurate cash handling, prevents double taxation, and helps avoid fictitious debts in the business partner settlement records.