We require an advance payment for low priced products which must be purchased to satisfy our customers.

This happens at the Point of sale level.

The solution we put in place:

Create a product called "Prepayment on future order"; this product is declared as sellable at the point of sales; with no applicable tax. The pricing is set to one euro.

The accounting entries for this transaction are

1. Debit a cash account (one of the cash method available at the POS; (Petty cash or Check or Credit card for instance)

2. Credit a Customer account called "Customer prepayments received"  (parent account being Customers or receivable).

A Payment receipt is printed and given to the customer.

At the time the sale is made, the standard transaction is done with applicable tax.

The payment must take into account the initial prepayment (the customer is requested to provide the receipt) and the balance

Thus the methods of payments at the POS level must have an additionnal method called "Prepayment received"

The cashier has 2 payment lines to use: the prepayment and any other payment method (Petty cash or Check or Credit card for instance).

The Prepayment method creates the following accounting entry:

1. Debit the Customer account called "Customer prepayments received"

2. Credit the standard customer accounts (which is debited by the sale transaction)