General Ledger Entries for a Regular Invoice with Pre-Invoices
When you post a final, regular invoice that has paid pre-invoices applied to it, in addition to the usual invoice general ledger entries, the pre-invoice receipt offset account that was credited for the cash receipts for the applied paid pre-invoice is reversed.
Pre-invoices, themselves, do not generate general ledger entries. However, the cash receipts that you enter for paid pre-invoices generate a credit to the pre-invoice receipt offset account. (You specify this account on the Miscellaneous tab in . This is usually a liability account.) This account is debited when you post a final regular invoice that has paid pre-invoices applied to it. The accounts receivable account is credited.
Example
The following is an example of the general ledger account postings for a final, regular invoice for $80,000 that has paid pre-invoice of $30,000 applied to it. The tax rate is 10%.
| Account | Debit | Credit |
|---|---|---|
| Fee Revenue | $70,000 | |
| Reimbursable Revenue | $10,000 | |
| Unbilled Revenue | $80,000 | |
| Accounts Receivable | $85,000 | |
| Unbilled Services | $80,000 | |
| Tax | $5,000 | |
| Pre-invoice Receipt Offset Account | $30,000 | |
| Accounts Receivable | $30,000 |
The tax is calculated after the pre-invoice fee amount is applied to the regular invoice. This is 10% of $50,000 ($80,000 - $30,000). Taxes were calculated and collected for the $30,000 on the pre-invoice.