Paying an invoice from the customer's advance (balance allocation)

A balance allocation applies a customer's existing credit or advance payment toward their invoice. Instead of asking the customer to pay cash, you use money they have already deposited or overpaid in the past. This is useful for advance deposits, overpayments, or credits from prior refunds.

Before you start

• The customer must have a positive balance (credit) on their account. This can come from:
  • A prior overpayment on an invoice.
  • An advance payment (deposit) collected for future use.
  • A credit from a refund or return.
• Your role must allow you to edit invoices.
• You know how much of the customer's balance to allocate to this invoice.

Steps

1. Go to Invoices list and open an invoice you want to pay using the customer's balance. Open in Usystems

2. Look for the Payments section (usually near the bottom).

3. Click Add Payment, Use Balance, or Balance Allocation (button label varies by system).

4. A balance allocation form appears. Enter:

   • Customer Balance Available: This is shown automatically; it's the credit available on the customer's account.
   • Amount to Allocate: The amount of the balance you want to apply to this invoice. It cannot exceed the available balance or the invoice total.
   • Description (optional): A note explaining the allocation (e.g., "Applied advance payment from deposit").

5. Click Apply or Confirm.

6. The payment is recorded, and the Balance Due on the invoice decreases by the allocated amount.

7. The customer's account balance also decreases by the same amount.

8. If the full invoice amount is allocated, the invoice moves to Paid status. If only part is allocated, it enters Partial status.

What happens to the customer's balance?

• Before: Customer has a 500 credit balance; invoice is 1,000.
• After allocation of 500: Customer's balance is 0; invoice balance is 500 remaining.
• The customer now owes 500 cash, or the balance can be replenished by future overpayments.

Accounting impact

When you allocate a customer's balance to an invoice:

• The Accounts Receivable account is credited with the allocated amount (the invoice's receivable decreases).
• The customer's Balance (or Advance/Deposit account, depending on how it was recorded originally) is debited (the credit is consumed).
• No cash movement occurs; this is purely an internal account adjustment.

Tips & common mistakes

• Balance allocation is not a payment. It doesn't bring in new cash; it uses existing credit.
• Partial allocation. You can allocate part of the balance and still require the customer to pay the remainder in cash.
• Check the balance first. Before allocating, verify the customer has sufficient credit available.
• Allocation is immediate. Once applied, the allocation is recorded and affects the invoice status immediately.
• Reversal. If you allocate by mistake, ask your administrator how to undo it; rules vary by system and permissions.