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What is an advance, and how should it be considered in my accounting?

Last updated: October 31, 2024

It is the advanced payment that you can request from your clients before providing the service, to ensure money that may be necessary to carry out the service contracted by your client.

How to include a down payment in your accounting

At the time your client makes this first part of the payment, you must issue an invoice for that amount, indicating that it is an advance payment.

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And the end of service invoice?

When you have already provided the service and you must make the final invoice for it, you must make two lines on your invoice:

  1. Total amount of the service, including the advance received previously
  2. Advance amount in negative
  3. Include in the comments that the advance payment received is discounted on invoice XXX


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