Understanding contact balances: receivable, payable and advances

What is a contact balance?

A contact balance is the amount of money a contact owes your business, or the amount your business owes that contact. In accounting terms, balances are split into two main types: amounts you expect to receive (receivable) and amounts you owe (payable).

Every time you create an invoice, bill, receipt, or payment involving a contact, that transaction updates their balance. The balance is always displayed in the contact's profile and on financial reports, giving you a live picture of who owes what.

Why balances matter

Balances serve three critical purposes:

1. Cash flow tracking — you know exactly how much money is outstanding or owed.
2. Collection and payment planning — you can prioritize which invoices to follow up on or which bills to pay.
3. Reconciliation — balances help you verify that your records match reality (e.g., a statement from your bank or a vendor).

How balances work in Usystems

Usystems tracks three kinds of balances for each contact:

• Receivable (Debit) — money customers owe you. This grows when you issue invoices or sales receipts, and shrinks when customers make payments.
• Payable (Credit) — money you owe vendors. This grows when you receive bills or make purchases, and shrinks when you make payments.
• Advances — prepayments or deposits held in trust. When a customer pays you in advance (before you issue an invoice), that money is recorded as a customer advance. When a vendor gives you a credit, it is recorded as a vendor advance.

Each contact can have balances in multiple currencies. If you work with a vendor in both USD and EUR, their payable balance will show separately for each currency.

Where you see balances

Balances appear in several places:

• Contact profile — Go to Contacts → Select a contact and view the balance summary at the top.
  Open in Usystems
• Invoice or bill creation — Before you save, you can see the contact's current balance in the form.
• Reports — The Aging Report and Account Statement show detailed balance breakdowns over time.
  View reports
• Payment screens — When paying an invoice or bill, the system displays available advances and current balances.

Understanding advances

An advance is money paid or received in advance of a transaction. Examples:

• A customer deposits money for a future order → customer advance.
• A vendor gives you a credit note for a return → vendor advance.
• You pay a vendor early to secure a discount → vendor advance (you now have a credit waiting to be used).

Advances can be applied to invoices and bills. For example, when a customer has a $500 advance, you can allocate that $500 toward their next invoice instead of asking for new payment.

Multi-currency balances

If your business operates in multiple currencies, each contact's balance will show separately for each currency used. For example:

• Customer A owes you 1,000 AFN and $50 USD.
• These are tracked as two separate receivables.

When you create an invoice in a specific currency, it affects only that currency's balance for that contact. See Setting a default currency for a contact for how to simplify this.

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