If the bonus/rebate amount is greater than the balance of the accounts receivable for this customer, then the difference might be considered an advance payment from the customer. Some of the auditors believe that we must generate a tax invoice to the customer in the amount of this advance.
| Rebate (based on the sales volume for the financial period) is registered with a credit note (Transaction Type = Mutual Settlements Adjustment, Advance check box selected) whose amount is equal to the bonus amount. |
How to process
Where: Accounting > Value Added Tax > Output VAT Transactions
- Click Create to create a new Output VAT Transaction.
- In the Company box, select the customer.
- In the Transaction Type field, select Advance Payment.
- In the Adjustment Type field, select Increase.
- Select the Generate GL Transactions check box.
- Make sure the link below the fields contains Prices Include VAT. Otherwise, click the link to open the Prices and Currency dialog box, select the Prices Include VAT check box there, and close the dialog box.
- In the Basis field, specify the credit note with the rebate amount.
- Click Save to assign the number to this document.
- On the Inventory/Services tab, click Add to append a new line.
- In the Contents column enter any comment to the transaction, for instance rebate as advance.
- In the Amount column, enter the bonus amount minus the amount that the customer owes.
- Click Post to register the document in the system.
- On the Main tab at the bottom, click the Generate Tax Invoice button. A link to the generated tax invoice appears.
- Click the link to review the tax invoice. On the command bar of the tax invoice, click the
button to view the journal entries generated for the document.