prepayment
Ability to:
Apply prepayments using a user-defined settlement date rather than auto-aligning with the invoice date.
Purpose:
To support real-world billing scenarios where an invoice is issued in one month (e.g., June), but the client settles it via prepayment in a later month (e.g., July). The current system auto-assigns the application date to the invoice date, which distorts accounting records and revenue timing.
Current Limitation:
- Xero does not allow users to define a separate settlement date when applying prepayments.
- Credit cannot be applied if the prepayment falls within a locked period, even if the application is meant for a current or future invoice.
- For businesses following a monthly closing approach, this creates a hard block—prepayments from prior months cannot be allocated at all without unlocking the books, defeating the purpose of a proper period close.
Bobbie Kan
shared this idea