Hello,
I like Xero but some of the basic sales and purchase ledger functionality seems to be extremely poor and has not been addressed for some time.
All other systems that I have used allow for payments on account (sales and purchase ledger)................Xero does not. So statements issued do not include payments on account. How do other's get around this?
A client's customer has asked for an activity statement today showing a significant sum due which the client has sent from Xero. This did not include a payment on account which my clients customer is now using as a reason to delay payment i.e. he wants to review the activity in detail....................not a great time saving tool!
Not being able to allocate credit notes as part of the process of matching payments is also a pain........
Surley this basic functionality should be sorted ASAP?
Replies (11)
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I regularly say on this forum that Xero has no proper sales or purchase ledger, and I recommend not using it for that and other reasons. This is one example of why.
Xero calls payments on account "overpayments". Yes they have been moaned about this.
If you post correctly they appear on the statements and when you post invoices you can allocate the money received in advance.
Us, our clients and I assume 500,000 businesses using Xero have no major problems with the Xero sales ledger and purchase ledger.
(Yes the credit note/matching is a whinge.)
"Overpayments" is not (for me) the correct option - there is also an option for "prepayments", which in my opinion is correct. I always distinguish the two by using overpayments for amounts that will be repaid to the customer - usually mistakes - and prepayments for payments on account.
When you receive a payment on account, post it against the customer name with the prepayment option selected from the drop down box in the receive money dialogue - you will normally have to use the add details option to see this. You can post the net amount to any nominal ledger code - I have a separate code for income in advance. When the invoice is raised for the goods or service you can allocate the prepayment to that invoice. The original posting to income in advance is then reversed.
It's all explained in Xero Central, and works very well, correctly accounting for VAT on receipt
https://central.xero.com/s/article/Record-a-prepayment
(You might need to be logged in to Xero to use that link)
The ledgers in Xero work fine for us and for all of our clients.
If the correct situation is £60k invoiced and £30k paid then you should have one invoice raised for £60k and one payment for £30k.
The £30k payment transaction can be created from the bank rec screen by applying to the £60k invoice and clicking 'split' to make the invoice part paid. Or it can be created from the invoice page and reconciled later.
Creating a Prepayment will create an additional sale as you have described. The sale is reversed when the prepayment is applied to an invoice.
Creating an Overpayment will not create an additional sale and is more like an unallocated payment on account.
Prepayments are to be used when an invoice has not been raised yet, but money has been received in advance and for VAT purposes a sale is to be recorded at the earlier of invoice date and payment date.
Yes it's possible, but not without creating each payment as an 'overpayment' transaction.