Invoicing the pre-payment item will result in a credit to its linked liability account. This will represent an amount owed by the business to the customer.
In this example, we will assume a business sells piano lessons in hourly blocks, and students need to pay for 5 hours in advance. The business has set up an item named Pre-paid Lessons (hours) to record the pre-payment.
Enter and record the pre-paid hours using an Item Invoice as per the sample sale below.
The customer payment for this invoice is entered using Sales > Receive Payments as per any other invoice payment.