Deffered BP

[Former Member]

Hi All

I need some help in implementing a special scenario..

Suppose there is a big project of construction and erection..For this we prepare a sales order, and there is a payment term attached to this order which reads as follows:

25 % payment after phase 1

25 % payment after phase 2

25 % payment after phase 3

25 % payment after phase 4

at the maturity of phase 1 we make the A/R invoice for 100% sale..here the debtor is divided into three parts

Current debtors A/c dr 25% -( prop adv received)

Deffered debtors A/c dr 75%

Adv Debtors A/c dr prop adv received%

To sales A/c 100%

Current debtors-> which has matured, which is 25 % in above case

Deffered debtors-> amt which is due, which is 75 % in above case

Adv Debtors ->Propportionate Advance received fron the debtors

here we are supposed to maintain three balances of the debtors

any clue how to do this would be of great helh

thanks & rgs

anand

[Former Member · Accepted solution]

The down payment is only good for the first installment. For the other, you need normal payment.

[Former Member]

Hi Anand,

Have you considered 4 installment for one invoice? That would be more easy to control.

Thanks,

Gordon

[Former Member]

That is what i am asking weather to create 4 installment or receive the payment through Downpayment request invoice...? and how to manage between current debtors balance and Deffered Debtors balance of the same debtor .. ?

rgs

anand

[Former Member]

I believe that Deferral is done only for the P&L items - i.e. Expenses and Revenues.

As far as i know the Revenue to be recognized next year is transferred to a Deferred Revenue a/c at Year End. This is material for which the delivery will take place next year.

Similarly Expenditure to a Deferred Expenditure a/c.

Revenue Dr 75

Deferred Revenue CR 75

and not as you say:

Revenue a/c Dr 75

Debtor a/c CR 75

Pls confirm that BS items will also get deferred - Debtors, etc.

Regards

Manish