Customer Float Account and Customer Prepayments

[renojen1]

We have a customer whom we hold a Float account for, i.e. we hold funds for them, and they make deposits to this account regularly.  I have this account set up as a Liability account. 

Q: When I receive a deposit/transfer into this account, I credit the Float account (liability), but which account do I debit?

Each month we issue an invoice to this customer for work done in the previous month.  Typically a few weeks after issuing the invoice, the customer instructs us to take funds from the Float account to pay their invoice.

Q: How do I pay this invoice from the Float account? And,

Q: How do I show the transfer of funds into our bank account?

Thank you

[Tracey_H · Accepted solution]

Hi @renojen1 

I'm sorry to see that no one has replied to you yet. When funds are deposited into your bank account record a Receive money transaction allocated to the float account. This will credit the float account and debit the bank account. The debit to the bank account will appear as a deposit to be matched with the bank transaction.

When you pay an invoice from the float account, in Receive payments select the float account in the Pay from account field. You will need to make sure you've selected Credit card as the Account type in Accounts list>>open float account. 

Please let me know if you need further help.

If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.