## Documentation Index

Access the complete documentation index at:
https://www.zoho.com/in/books/help/llms.txt

Use this file to discover all available documentation pages before proceeding.

# Vendor Advances

## Payment Statuses of a Vendor Advance

Depending on whether you’ve [enabled approvals](/in/books/help/transaction-approval-new-flow/configure-approvals.html#configure-approval) for payments or not, a vendor advance goes through the following statuses as it is recorded and processed.

Payment Status

Description

Applicable When

**Draft**

The vendor advance is created but not processed.

Approvals is enabled or disabled

**Pending Approval**

The vendor advance is waiting for approval.

Approvals is enabled

**Approval Rejected**

The vendor advance is rejected for approval.

Approvals is enabled

**Approved**

The vendor advance is approved and ready to be marked as paid and applied to bills.

Approvals is enabled

**Paid**

The vendor advance is partially or fully applied to bills.

Approvals is enabled or disabled

**Void**

The vendor advance is marked as void and will not be processed.

Approvals is enabled or disabled

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## Record a Vendor Advance

If you’ve given an advance payment to your vendor on which GST is applicable, you can record it in Zoho Books. To record a vendor advance:

*   Log in to your Zoho Books organization.
*   Go to _Purchases_ on the left sidebar, and select **Payments Made**.
*   Click **\+ New** in the top right corner.

![New Vendor Advance](/books/help/images/payments-made/new-vendor-payment-made.png)

*   Select the _Vendor Advance_ tab at the top, and complete the following fields:

![Vendor Advance Tab](/in/books/help/images/payments-made/vendor-advance-tab.png)

*   **Vendor Name:** Choose the vendor for the advance payment.
*   **Destination of Supply:** Select the supply location to determine GST applicability.
*   **Branch:** If you’ve enabled [Branches](/in/books/help/branches/), choose the branch from the dropdown.
*   **Location**: If you’ve enabled [Locations](/in/books/help/locations/Locations), choose the location from the dropdown.
*   **Payment#:** If you’ve enabled auto-generation of payment numbers, this field will be filled in automatically. To enter it manually:
    *   Click the **Settings** icon to the right of the field.
    *   In the _Configure Payment Number Preferences_ popup, select **Add payment number manually for this payment**.
    *   Enter a prefix and the payment number, and click **Save**.
*   **Description of Supply:** Provide details of the goods or services. This appears on the payment voucher.
*   **Payment Made:** Enter the advance amount you’ve paid.

**Note:** If the payment is in a different currency, the exchange rate appears below the **Payment Made** field by default. Click the **Edit** icon to change the rate.

*   **Reverse Charge:** Check this box if the advance payment is subject to reverse charge. Once enabled, a _Tax_ field will appear. Choose the applicable tax from the dropdown based on the reverse charge amount.
*   **TDS:** Select the reason and percentage of tax deducted at source (if applicable). To edit the amount, click the **Edit** icon next to it.
*   **Payment Date:** Choose the date for the payment.
*   **Payment Mode:** Select the payment mode. Click **\+ Configure Payment Mode** from the dropdown to add a new payment mode.
*   **Paid Through:** Choose the account used for the payment.
*   **Deposit To:** Choose the account where the advance payment should be recorded.
*   **Reference#:** Enter a reference number if needed.
*   **Notes:** Add any notes if required (not visible to the vendor).
*   **Attachments:** Click **Upload File** to add supporting documents.
*   Click **Save**.

The vendor advance will now be recorded.

* * *

## Apply Vendor Advance to a Bill

After creating a vendor advance, you can apply it to your vendor’s bills. To do this:

*   Go to _Purchases_ on the left sidebar, and select **Payments Made**.
*   Choose the vendor advance you want to apply to a bill.

**Note:** If the vendor advance is saved as a draft, you need to mark it as paid. Click **Mark as Paid** to record the payment and apply it to the bills.

*   In the _Payment Details_ page, click **Apply to Bills** at the top.

![Apply Vendor Advance to a Bill](/in/books/help/images/payments-made/apply-vendor-advance-to-a-bill.png)

*   Next, in the _Apply Credits from Vendor Advance_ popup, you’ll see all **Open** bills for the vendor. Under the _CREDITS TO APPLY_ column, enter the amount you want to apply for each bill.

![Apply Credits from Vendor Advance](/in/books/help/images/payments-made/apply-credits-to-vendor-advance-popup.png)

*   Click **Save**.

The vendor advance will now be applied to the selected bill amount.

**Note:** If you’ve enabled reverse charge for the vendor advance, it will also be applied to the vendor’s bill.

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## Record a Refund for a Vendor Advance

If the vendor refunds part or all of the vendor advance, you can record it in Zoho Books. Here’s how:

*   Go to _Purchases_ on the left sidebar, and select **Payments Made**.
*   Choose the advance payment you want to create a refund for.
*   On the _Payment Details_ page, click the _More_ icon at the top and select **Refund** from the dropdown.

![Record a Vendor Refund](/in/books/help/images/payments-made/apply-credits-to-vendor-advance-popup.png)

*   In the _Refund_ page, complete the following fields:
    *   **Amount:** Auto-filled with the full balance amount. Update the amount if you’re recording a partial refund.
    *   **Refunded On:** The current date appears by default. Change it if required.
    *   **Payment Mode:** Select an existing payment mode. Click **\+ Configure Payment Mode** to add a new one.
    *   **Exchange Rate:** If in a different currency, the rate is applied automatically. Click the **Edit** icon to adjust it manually.
    *   **Description of Supply:** Mention the details of the goods or services involved. This appears on the payment voucher.
    *   **To Account:** Choose the account to record the refund.
    *   **Description:** Add any additional notes if required.
*   Click **Save**.

![Record a Vendor Refund Popup](/in/books/help/images/payments-made/apply-credits-to-vendor-advance-page.png)

The refund will now be recorded.