When working with customer prepayments in Sage 50, it’s important to choose a method that balances accounting accuracy with future flexibility. While the software allows users to mark transactions as Prepaid, this approach has a major caveat: once saved, prepaid transactions are locked from further edits. This limitation can create workflow bottlenecks if corrections are needed later.
Why You Should Avoid the “Prepaid” Option
Marking a customer invoices as prepaid may seem like a quick solution for deposits or early payments, but:
- The transaction becomes non-editable after saving.
- You cannot reassign or link the payment to an invoice later.
- Any corrections require deleting then transaction and re-entering.
- May causes problems if you need to perform the data integrity check utilities.
Recommended Approach: Credit Memos + Sales Invoice
A more flexible and auditable method is to use Credit Memos in tandem with a Sales Invoice. Here’s how it works:
- Create a Credit Memo:
- Enter the prepayment as a credit memo under the customer’s account.
- This creates an open credit balance that can be reviewed and adjusted later if necessary.
- Apply the Credit Memo via Receive Money:
- When the invoice is ready, match the credit memo with the credit memo in the Receive Money Window.
- This links the prepayment (credit memo) directly to the customer’s open invoice.
Benefits of This Method
- Both transactions remain editable, providing greater flexibility.
- You maintain a cleaner audit trail with clear application of funds.
- Helps avoid the need to void and re-enter transactions—saving time and reducing errors.