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Received Advance Invoices (Purchase)

Suppliers' advance (proforma) invoices as purchase documents, the payment to them, the supplier's tax document on that payment and the deduction on the final bill.

What it is for

This is the supplier side of sale_order_advance_invoice. When a supplier asks for an advance, you deal with:

1. the received advance invoice (CZ přijatá zálohová faktura, SK prijatá zálohová / preddavková faktúra) — a request for payment, never posted;
2. your payment of it;
3. the supplier's tax document on the payment (CZ daňový doklad k přijaté platbě, SK faktúra k prijatej platbe) — the document that entitles you to deduct the VAT on the advance;
4. the final bill, from which the advance and its VAT are deducted.

The module registers the received advance invoice as a purchase order of its own, numbered PADV00001, PADV00002…, and books only the payment and the tax document.

Legal background

• The supplier's side. A payment received before the supply is taxed on the day it is received — Slovakia § 19 ods. 4 zákona o DPH, Czech Republic § 20a odst. 2 zákona o DPH. The supplier must issue the tax document within 15 days of the payment or by the end of that month in Slovakia (§ 73 ods. 1 písm. b)), and within 15 days in the Czech Republic (§ 28 odst. 8).
• Your deduction. To deduct the VAT you must hold the supplier's tax document — Slovakia § 51 ods. 1 písm. a), Czech Republic § 73 odst. 1 písm. a). In Slovakia the deduction is made at the earliest in the period in which the right arose and at the latest in the last period of that calendar year, provided you have the document by the filing deadline of the return in which you claim it; if you do not have it by the filing deadline for the last period of that year, you deduct in the period in which you receive it (§ 51 ods. 2). In the Czech Republic the deduction can be claimed at the earliest for the period in which the conditions are met (§ 73 odst. 2). That is why the accounting date of the tax document is yours to choose (see below).

Setting it up

Accounting → Configuration → Settings, block Received Advance Invoices:

Without a localization add-on you fill these in yourself.

Localization add-ons

l10n_cz_purchase_order_advance_invoice and l10n_sk_purchase_order_advance_invoice fill in the settings above for every company with the Czech or Slovak chart of accounts — at installation, and again whenever the chart is loaded later, for example for a new company:

Only empty settings are filled, so accounts you chose yourself are kept.

Registering a received advance invoice

Purchase → Orders → Received Advance Invoices (also Accounting → Vendors → Received Advance Invoices), then New. Enter the supplier and the lines as on the supplier's advance invoice, with the VAT rates it states. Optionally choose the Parent Purchase Order it belongs to, and tick Long-term Advance to use the long-term account (when one is configured).

A purchase order with advances shows an Advances smart button.

With Inventory. The goods are received on the parent purchase order, never on the advance: with purchase_order_advance_invoice_stock, which installs itself when Inventory is present, confirming or paying an advance creates no receipt, even when its lines are stockable products.

Paying it

On the advance:

• Register Payment — creates and posts a supplier payment from a bank or cash journal to the clearing account, and confirms the advance. The amount cannot exceed what is unpaid.
• Link Payment — attaches a supplier payment that already exists for the same supplier and is not linked to another advance.

Payment Status (Not Paid, Partially Paid, Fully Paid, Overpaid), Amount Paid and Paid Date follow the linked payments.

Registering the supplier's tax document

Once something is paid, the Accounting Status becomes Waiting for Tax Document and Tax Document Expected By shows the deadline. When the supplier's tax document arrives, click Register Received Tax Document:

This creates a draft vendor bill in the tax documents journal, split by VAT rate in proportion to the advance's lines, with the net amount on the paid advances account and the payable on the clearing account. Check it against the paper and post it. Posting reconciles it on the clearing account with the advance's payments, and the status becomes Accounted once the tax documents cover the whole paid amount.

The Tax Documents smart button lists them.

Deducting on the final bill

• From the parent purchase order: Create Bills adds a deduction for every paid advance not yet fully deducted to the newest draft bill.
• Any draft vendor bill: Deduct Advance Invoices offers the supplier's advances with something left to deduct.

The deduction is:

• for the part covered by posted tax documents — a negative copy of each line of the tax documents: the net amount on the paid advances account with the same VAT, so the input VAT deducted on the advance is reversed;
• for the part paid but not covered by a posted tax document — a single negative line for that amount, on the paid advances account, without VAT.

Only what is still left is deducted. A bill that comes after an earlier deduction takes the documented part first and copies the tax documents' lines only for what of them is left.

Chasing the supplier

The scheduled action Received Advance Invoices: chase overdue tax documents runs daily. For every advance still waiting for a tax document after Tax Document Expected By, it schedules a to-do activity "Advance tax document overdue — chase …" (once). The list has the filters Waiting for Tax Document, Tax Document Overdue and Unpaid.

The expected date follows the company's country (see Legal background): 15 days after your payment in the Czech Republic; in Slovakia 15 days after the payment or the end of that month, whichever is later (15 days for payments before 2016); 15 days anywhere else. The activity has its own type, Chase Advance Tax Document, so it is scheduled once whatever language the scheduled action runs in.

Limitations

• The advance is an ordinary purchase order underneath. Do not use Create Bills on the advance itself.
• Link Payment does not check which account the payment was booked to. Only a payment booked to the clearing account is reconciled with the tax document automatically.
• Without a tax document, the deduction goes to the paid advances account while the payment sits on the clearing account. Clear the two with a manual entry.
• Reverse-charge and intra-Community advances are out of scope: an advance payment creates no tax point there, so register no tax document for them.