Hi Marion, nice video, very clear to follow without over explaining things that youtubes often do. Can you please tell me would an over payment appear in your profit line? i have down payments from customers before a project has started and don't really want it to be visible until the project has started. thanks for your help.
Hi Dan, you are correct that you don't want an overpayment to appear on your profit and loss account. When you enter in Xero it will not, but instead it will show that your customer has paid you in advance. This will appear on your balance sheet rather than profit and loss account, against the code called Aged Receivables.
how do you apportion it over time to allow for split usage of the prepayment so that it doesn't skew your P&L and GST? We have a payment that is 3 monthly but our GST is 2 monthly
Hi, Thanks for your excellent video. I have a customer who has paid 4 invoices together with 2 pre-payments, how do I reconcile this all together? thank you
On the bank reconciliation, use Find and Match to select the 4 invoices, then choose New Transaction - Receive Money. Change from Direct Payment to Overpayment and the remainder will sit in your customer’s account until you invoice and can then match to the balance.
@@Rrrr-ev5co I know 'prepayment' sounds correct but a Xero 'prepayment' transaction creates a dummy invoice and allocates amounts to VAT. I would use 'prepayment' for amounts paid in advance where you need to account for VAT at that stage. Maybe I will do a video explaining the difference.
@@XUSolutions Thank you for your quick reply and explanation. I have been using prepayment and selecting the sales account 4000 and T0 to record prepayments so far. I was confused as to if we should use 4000 sales account or any other account.
@@Rrrr-ev5co do you want to email me and explain exactly the transactions that you are entering this way. I can then confirm if you should be using 'prepayments' and also explain why? - marion@xuacademy.com
Very Nice Video. Once question why do you choose overpayment instead of prepayment?
Very helpful video and super clear explanation. Thank you.
You’re welcome
Hi Marion, nice video, very clear to follow without over explaining things that youtubes often do. Can you please tell me would an over payment appear in your profit line? i have down payments from customers before a project has started and don't really want it to be visible until the project has started. thanks for your help.
Hi Dan, you are correct that you don't want an overpayment to appear on your profit and loss account. When you enter in Xero it will not, but instead it will show that your customer has paid you in advance. This will appear on your balance sheet rather than profit and loss account, against the code called Aged Receivables.
how do you apportion it over time to allow for split usage of the prepayment so that it doesn't skew your P&L and GST? We have a payment that is 3 monthly but our GST is 2 monthly
Nice class can you please post videos Xero invoice with receipts bank
Hi Mohamed, I don't have any planned soon but do keep checking UA-cam for my new videos.
@@XUSolutions yes sure I am waiting
@@mohamedhameed8911 thanks for your patience
Hi, Thanks for your excellent video. I have a customer who has paid 4 invoices together with 2 pre-payments, how do I reconcile this all together? thank you
On the bank reconciliation, use Find and Match to select the 4 invoices, then choose New Transaction - Receive Money. Change from Direct Payment to Overpayment and the remainder will sit in your customer’s account until you invoice and can then match to the balance.
@@XUSolutions could you please explain why did you choose overpayment and not prepayment? Is it not prepayment if they have paid in advance?
@@Rrrr-ev5co I know 'prepayment' sounds correct but a Xero 'prepayment' transaction creates a dummy invoice and allocates amounts to VAT. I would use 'prepayment' for amounts paid in advance where you need to account for VAT at that stage. Maybe I will do a video explaining the difference.
@@XUSolutions Thank you for your quick reply and explanation. I have been using prepayment and selecting the sales account 4000 and T0 to record prepayments so far. I was confused as to if we should use 4000 sales account or any other account.
@@Rrrr-ev5co do you want to email me and explain exactly the transactions that you are entering this way. I can then confirm if you should be using 'prepayments' and also explain why? - marion@xuacademy.com
It should be Prepaymet & not Overpayment