Avoid automatic credit allocations
By design, Manager automatically applies receipts from customers or payments to suppliers to the sales or purchase invoice with the oldest due date if a specific invoice is not chosen during account selection:
If there is no unpaid invoice, the receipt or payment amount is posted to Accounts receivable (for a customer) or Accounts payable (for a supplier) and automatically applied to the next sales or purchase invoice issued for the customer or supplier involved. This automatic credit allocation is the default process for handling deposits from customers or advance payments to suppliers.
You can avoid automatic credit allocations by creating a special account for the customer or supplier to hold credits until they are eventually allocated manually. This way, you can be sure receipts and payments are applied only to specific invoices.
The process described in this Guide is totally optional. Advances, deposits, and refunds are handled automatically during normal operation of Manager. But some users prefer to track them separately from ordinary Accounts receivable or Accounts payable, either for improved visibility in accounting records or for contractual reasons.
Set up the special account
Enable the Special Accounts tab by clicking Customize below the left navigation pane, checking the box for Special Accounts, and clicking Update below the list:
Go back to the Special Accounts tab and click New Special Account:
Name the account to match the customer or supplier. Leave the default
Control account as Special Accounts:
Northwind Traders has a customer named Morgenstern Gesundkost. Because Northwind expects deposits to be paid with orders, it establishes a special account for Morgenstern Gesundkost. The initial balance of the account is zero:
Use the special account
To avoid automatic credit allocations, post transactions to the special account instead of Accounts receivable or Accounts payable as you normally would.
Allocate the credit manually
To apply the credit manually to an invoice, simply add a new line item with a negative amount equal to the deposit in the special account.
When Northwind raises a sales invoice for the order to which the deposit applies, it adds a new line item as described above:
This results in a new invoice for the difference between purchased items and the earlier deposit. The balance under Special accounts goes to zero:
By default, Special accounts appears in the Assets group of the Balance Sheet when the first special account is created. Customer deposits of the type illustrated in the examples above contribute to the account balance as negative amounts. Deposits paid to suppliers appear as positive amounts. If your Special accounts balance is usually negative, you may want to move it to the Liabilities group by editing the account under Settings Chart of Accounts.
The examples shown illustrate a deposit by a customer and application to a sales invoice. Procedures for deposits to suppliers and application to purchase invoices are similar, but the initial payment is a Spend money rather than a Receive money transaction.