Partial Payment Workflow

Overview

The Partial Payment Workflow allows you to record situations where a customer does not pay the full invoice amount at once. This is common in freight operations where customers may:

  • Pay a deposit before shipment

  • Pay in multiple instalments

  • Overpay in advance and use the balance for future invoices

This workflow ensures that:

  • Customer balances are always accurate

  • Outstanding amounts are clearly tracked

  • Advance payments can be reused across invoices

The walkthrough below demonstrates how to record a partial payment against a Sales Invoice and view the updated invoice status.

Partial-Payment-Workflow.mp4

How it works

There are two approaches to recording partial payments:

Direct Partial Payment (recommended for straightforward cases)

The simplest method is to create a Payment Entry directly from the Sales Invoice and enter an amount less than the outstanding balance. The Accounting Module handles the rest — the invoice status changes to Partly Paid and the outstanding amount updates automatically.

The video above walks through this approach using invoice BEINV26040124 (customer 3R TRANSPORTATION, Grand Total $25.00 SGD). A Payment Entry of $12.50 was submitted, reducing the outstanding balance to $12.50 and changing the invoice status to Partly Paid.

Steps:

  1. Open the Sales Invoice in the Accounting Module and confirm the Outstanding Amount

  2. Click Create → Payment from the invoice toolbar

  3. The Payment Entry form pre-fills with the customer details and full outstanding amount

  4. Change the Paid Amount to the partial amount being received

  5. Select a Mode of Payment (e.g. Cash, Bank Draft, Wire Transfer)

  6. Save, then Submit and confirm

Note: The Paid Amount field accepts any value up to the outstanding balance. You can make multiple partial payments against the same invoice — each one reduces the outstanding amount further until the invoice is fully paid.

Advance Payment + Allocation (for complex scenarios)

For cases involving prepayments, overpayments, or allocating a single payment across multiple invoices, use the advance payment method:

  • Advance Payment (Prepayment) → Recorded as a negative balance

  • Payment Allocation (Knock-off) → Matching payments to invoices

This method gives more flexibility when payments need to be split across invoices or when a customer pays before the invoice is issued.

Scenario 1: Customer pays partially against an invoice

The video walkthrough above demonstrates this scenario using the direct method. The steps below describe the advance payment approach, which is useful when you need to record the payment before allocating it.

Example

  • Sales Invoice: $400

  • Customer pays: $200 (partial payment)

Step 1: Create Sales Invoice

Create a Sales Invoice as usual.

Step 2: Record Advance Payment

Instead of directly paying the invoice, you first record this as an advance payment:

  1. Create a Payment Entry

  2. Select:

    • Party Type: Customer

    • Party: Customer Name

  3. Enter amount as: -200 (negative value)

👉 This indicates that the customer has paid in advance.

Step 3: Allocate Payment to Invoice (Partial Knock-off)

  1. Go to General Payment Entry

  2. Select the same customer

  3. Click "Get Outstanding Invoices"

  4. You will see:

    • Invoice: $400

    • Advance Payment: -$200

  5. Adjust the allocation:

    • Apply $200 to the invoice

  6. Save and Submit

Result

  • Invoice Outstanding: $200 remaining

  • Advance Payment: Fully used

Scenario 2: Advance payment exceeds invoice

Example

  • Advance Payment: $1,000

  • Invoice: $400

Step 1: Record Advance Payment

Create a Payment Entry:

  • Amount: -1000

Step 2: Allocate to Invoice

  1. Go to General Payment Entry

  2. Select customer

  3. Pull outstanding items

  4. Apply only $400 to the invoice

Result

  • Invoice Outstanding: $0 (fully paid)

  • Remaining Advance: $600 still available

This remaining balance can be used for future invoices.

Key Behaviour to Understand

  • Advance payments always appear as negative values

  • System allows flexible allocation:

    • Full payment

    • Partial payment

    • Multiple invoices

  • Remaining balances are automatically carried forward

Examples

Scenario

Invoice

Payment

Result

Partial Payment

$400

$200

$200 outstanding

Exact Payment

$400

$400

Fully paid

Overpayment

$400

$1000

$600 advance balance

Best practices & notes

  • For straightforward partial payments, use the direct method (Create → Payment from the invoice) — it is faster and requires fewer steps

  • For prepayments or multi-invoice allocations, use the advance payment method (negative amount + General Payment Entry allocation)

  • Always record payments as advance first, then allocate when using the advance method

  • Do not directly adjust invoice amounts — use allocation instead

  • Check outstanding amounts after submission to confirm accuracy

  • Advance balances can accumulate if not properly allocated

  • This workflow ensures accurate AR reporting and audit trail

FAQ

Why is the payment entered as a negative amount?

Negative values represent money received in advance (credit balance for the customer). This only applies to the advance payment method — when using the direct method from an invoice, you enter the actual positive amount received.

Can I apply one payment to multiple invoices?

Yes. You can split and allocate the payment across multiple invoices using the General Payment Entry allocation screen.

What happens if I don't allocate the advance payment?

It will remain as a credit balance and not reduce any invoice outstanding.

Can I partially allocate multiple times?

Yes. You can keep allocating portions of the advance until it is fully used.

How do I check remaining advance balance?

When pulling outstanding items for the customer, any remaining advance will appear as a negative value.