The advance is larger than the first invoice. What happens?

The invoice is settled in full and the rest stays as a credit on the balance for the next invoice.

I recorded a payment Against Voucher but the invoice turned out to be wrong. Can I turn it into an advance?

Yes. Edit the payment, switch the mode to Advance Payment and save. The invoice goes back to Unpaid and the money waits on the balance.

Docs · Payments · How-to

Record an advance or on-account payment

You will have the money in the right account and sitting as a credit on the customer’s or supplier’s balance, ready to be adjusted against the next invoice.

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Sometimes money moves before there is a bill: a new customer pays a deposit, a contract customer pays a month in advance, or you send a truck owner part of the hire before the trip. In Customer Payments and Supplier Payments this is the Advance Payment mode.

An advance is a normal payment with no allocation. It changes the cash or bank account at once, and it changes the party’s balance at once; what it does not do is touch any invoice until one exists.

Before You Start

The customer or supplier exists.
A Payment Type and the receiving or paying account exist under Settings › Payment Type and Books › Bank & Cash.

Steps

Open Payments › Customer Payments (for money in) or Payments › Supplier Payments (for money out) and click Add.
Pick the party in Received From or Paid To.
Choose the Payment Type and the Received Account or Paid from, and set the Date.
Switch the mode to Advance Payment. The invoice allocation table is not used.
Enter the Amount.
Type why in Notes, for example the contract or trip it is for, and add the Reference no.
Save, and print the receipt if the customer wants one.
When the invoice is raised later, open the advance from the list, or record the next payment Against Voucher; the advance is adjusted against the bill.

Fields On This Screen

Field	What to enter	Required
Received From / Paid To	The customer or supplier	Yes
Payment Type	Method of payment	Yes
Received Account / Paid from	Cash or bank account used	Yes
Date	Date the money moved	Yes
Mode	Advance Payment	Yes
Amount	The advance	Yes
Reference no	Bank or cheque reference	Recommended
Notes	What the advance is for	Recommended
Payment Files	Advice or agreement	No

What This Changes

The cash or bank account moves immediately and the entry appears in the Cash Book, Bank Book and Day Book.
The party’s Current Balance shows the advance as a credit (for a customer) or a debit (for a supplier) on the Customers or Suppliers list and on their statement.
No invoice changes status. The Customer Invoice Aging Report and the list KPIs Amount to Receive and Amount to Pay still show the open invoices in full until the advance is adjusted.
The advance uses the Advance Payment voucher series from Settings › Invoice Settings.

Tips

Write the reason in Notes every time. Three months later, an unallocated advance with no note is the hardest thing on a statement to explain.
Review unadjusted advances at month end: compare the Customers Balance Statement with the aging report total; the difference is usually advances waiting for a bill.
A refund of an advance is a payment in the other direction; record it on the opposite screen with a clear Note rather than deleting the original.

Frequently asked questions

Need Help?

Chat with the NShine ERP support team on WhatsApp at +91 79950 87755, or ask from inside the app. Last checked 9 November 2026 against app.nshineerp.com.