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Advance Invoices (Sales)

Advance (proforma) invoices as their own documents, a tax document for every payment received on them, and the deduction of the advance on the final invoice.

What it is for

In Czech and Slovak practice an advance is handled in three documents:

1. the advance invoice (CZ zálohová faktura, SK zálohová or preddavková faktúra) — a request for payment, not an accounting or tax document, and not posted;
2. the tax document for the payment received (CZ daňový doklad k přijaté platbě, SK faktúra k prijatej platbe) — issued once the money has arrived, because the VAT falls due on the day of payment;
3. the final invoice (CZ vyúčtovací / konečná faktura, SK vyúčtovacia faktúra) — the whole supply, from which the advance and the VAT already declared on it are deducted, so the VAT is paid only once.

Odoo's own down payments post an invoice for the advance straight away. This module instead keeps the advance invoice as a separate quotation-like document, numbered ADV00001, ADV00002…, which the customer can pay by QR code, through the customer portal or by bank transfer. Only the payment and the tax document reach the ledger.

The module is country-neutral. The Czech and Slovak account wiring comes from the localization add-ons described under Localization add-ons. The supplier side is purchase_order_advance_invoice.

Legal background

Slovakia — zákon o DPH:

• If a payment is received before the supply, the tax liability on the payment arises on the day it is received — § 19 ods. 4.
• A payer must issue an invoice when it receives a payment before the supply of goods or services to another taxable person or legal entity — § 72 ods. 1 písm. f) and písm. g) — within 15 days of receiving the payment or by the end of the calendar month in which it was received — § 73 ods. 1 písm. b).
• The invoice states the date the payment was received if it differs from the date of issue — § 74 ods. 1 písm. d).

Czech Republic — zákon č. 235/2004 Sb., o dani z přidané hodnoty:

• § 20a odst. 2: a payment received before the supply creates the obligation to declare VAT on the day it is received — unless the supply is not yet known with sufficient certainty, which § 20a odst. 3 defines as knowing at least the goods or service, the VAT rate and the place of supply.
• § 28 odst. 1 písm. d) requires a tax document on such a payment, and § 28 odst. 8 sets the deadline: 15 days from the day the obligation arose.
• § 36 odst. 2: the tax base is the payment received less the VAT.
• § 37a: on the final invoice the base is the difference between the whole supply and the advances already taxed. If the difference is negative, the rate and exchange rate used on the advances apply.

Setting it up

Sales → Configuration → Settings, block Invoicing:

Without a localization add-on you fill in the three accounts yourself.

Before the first advance, also check:

• A bank account on the company — the advance invoice prints a bank account of the company, preferably one in the order's currency, with a payment QR code when QR codes are enabled in the invoicing settings.
• The Advance product — created the first time an advance is made, it is the product of every advance line unless you choose Include the ordered items (see below). Its customer taxes decide the VAT of such advances.

Localization add-ons

l10n_cz_sale_order_advance_invoice and l10n_sk_sale_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.

Creating an advance invoice

On a confirmed sales order, click Create Advance Invoice and choose:

Tick Include the ordered items whenever the order's VAT rate differs from the Advance product's, or the order mixes rates. Without it every advance line carries the Advance product's taxes, and so does the tax document raised on the payment. The final invoice then settles the difference, so no VAT is lost or charged twice, but the VAT declared on the payment was at the wrong rate.

The advance invoice opens as a new document linked to the order. On it:

• Due Date follows the payment terms; Bank Account and Payment QR-code choose what is printed.
• Long-term Advance sends the net advance to the long-term account. Tick it before the advance is confirmed.
• Send by Email and Print produce an "Advance Invoice" with the issue and due dates, the gross amounts without a VAT breakdown, and the bank account, the advance number as payment reference and the QR code.

The order gets an Advance Invoices section with a zero-quantity line per advance, kept up to date with its state, payment date and tax document, and an Advance Invoices smart button. Advance invoices do not appear under Quotations or Orders. They have their own menu, Sales → Orders → Advance Invoices and Accounting → Customers → Advance Invoices, which is also where you create one without an order (see Advances without an order).

Confirming an advance never creates a delivery: the goods are delivered from the original order.

Receiving the payment

The Payment Status of an advance (Not Paid, Partially Paid, Fully Paid, Overpaid) follows the payments linked to it. The two smart buttons below appear once the advance has been sent or confirmed and part of it is still unpaid. A payment can arrive in four ways:

• Online, through the customer portal, when a payment provider is configured — the advance requires payment, like an online quotation. The payment is booked to the clearing account.
• Register Payment (smart button) — records a payment in a bank or cash journal, posted to the clearing account, and confirms the advance if it was still a quotation. The amount cannot exceed what is unpaid.
• Link Manual Transfer (smart button) — attaches an incoming payment that already exists for the same customer and is not linked to any invoice. If it was booked to the customer's receivable, a transfer entry in a miscellaneous journal moves it to the clearing account.
• From the bank statement, automatically or with a wizard, with sale_order_advance_invoice_payment_match.

The tax document for the payment

Once something is paid, the advance's Accounting Status moves from Nothing to Account to Waiting, and the header shows Create Invoice. Clicking it creates a draft tax document for the paid amount not yet covered by an earlier tax document. Each instalment of a partly paid advance can therefore have its own.

The tax document:

• is a customer invoice in the TDADV journal, split by VAT rate in proportion to the advance's lines;
• has the payment date as its taxable supply date and a line reading "Payment received for Advance Invoice ADV00042 on …";
• puts the net amount on the received-advance account (324000, or 475000 for a long-term advance) and the receivable on the clearing account;
• prints as Tax Document, with Issue Date, Date Paid in place of the taxable supply date, and no due date, payment instructions or QR code.

Check it and post it. Posting reconciles it on the clearing account with the payments of that advance, and the status becomes Accounted.

The advance list shows the deadline in Accounting Date Due, turning red once it has passed. It follows the company's country (see Legal background):

Settling on the final invoice

Invoice the order as usual (Create Invoice on the order). Every paid advance is added below the regular lines in an Advance Invoices section, as a negative line:

• The part covered by posted tax documents: the net amount those documents declared, on the received-advance account, with their VAT, so the VAT declared on the payment is given back. Documents at several rates are deducted one line per rate.
• The part received but not covered by a posted tax document: gross, without VAT, on the Advance product's income account. The final invoice then charges the VAT on that part itself.

Only what was received is deducted: a partly paid advance is deducted for the part paid, not for its full amount. A tax document still in draft covers nothing. An advance is deducted only once something has been paid on it, and only together with regular lines that are ready to invoice. If nothing else can be invoiced yet, for example because nothing has been delivered, Odoo reports that there is nothing to invoice.

Foreign currency. A deduction is converted at the rate its tax documents were declared at, and so is the part of the supply the advance paid for. Only the rest of the supply is converted at the final invoice's rate. A fully prepaid supply therefore nets to zero VAT and leaves nothing on the receivable, as § 37a requires for the Czech Republic.

Advances without an order

An advance invoice created directly from the Advance Invoices menu has no order. To settle it, open the final customer invoice while it is still a draft and click Link Advance Invoices. You can pick confirmed advances of the same customer with something paid on them that no other invoice deducts. Each one is added exactly as on an order's final invoice: the part covered by posted tax documents net with their VAT reversed, one line per rate, and the rest of what was received gross without VAT.

Limitations

• The tax document is not created on payment by itself: click Create Invoice, or let the bank matching add-on create it.
• A payment attached with Link Manual Transfer is moved to the clearing account only while its receivable leg is still open and the company has a miscellaneous journal other than the tax documents' one. Otherwise reconcile the tax document's clearing line with it yourself.
• Without a tax document, the deduction does not touch the clearing account, and the payment stays there until you clear it with a manual entry. Remember that the VAT liability arises on payment in both countries (with the Czech § 20a odst. 2 exception for a supply not yet known with sufficient certainty).
• Without Include the ordered items, the advance and its tax document use the Advance product's VAT rate, not the order's.
• Reverse-charge and intra-Community supplies are not handled specially: do not issue a tax document where the payment does not create a tax point.