A supplier advance review should establish what the company paid for and what remains to be delivered, invoiced or refunded. Retrieve the approved order and payment evidence before clearing the balance. A payment becoming old does not automatically make it an expense or prove that the supplier owes a refund.

Accounting records, calculator and glasses on a desk
Illustrative photograph by Cht Gsml.

Identify the purpose and terms

Record the supplier, company, order reference, amount and currency. Separate an advance for goods or services from a refundable security deposit. The description in a bank narrative may not explain the underlying arrangement.

Keep the accepted terms and subsequent changes. Ask the purchasing owner what happened commercially instead of relying only on finance’s expectation of a future invoice.

Trace delivery and application

Compare goods received, services completed, invoices issued and any credits. Check whether the advance was applied to a later invoice under a different reference. Avoid paying the final invoice in full while leaving a supported advance unused.

Build a schedule showing original payment, amounts applied, refunds and the remaining balance. Give the accountant evidence for the classification rather than using a balancing journal to remove the item.

Example: the order is partly completed

The company paid in advance for a larger order but received only part. Retain delivery evidence and supplier correspondence about the remainder. The unresolved amount may require a commercial decision as well as an accounting review; do not assume it is fully recoverable or already lost.

Agree the next action

Assign an owner for the missing invoice, delivery query or refund request. Keep any approved settlement or write-off decision with its support. IRAS recordkeeping guidance requires transactions to remain explainable, including amounts paid before the final supporting invoice arrives.

Related practical guidance

For the surrounding records and responsibilities, see bookkeeping basics, company records to keep, bookkeeping and accounting.

Official guidance: IRAS official guidance.

Help with your company records

For accounting, bookkeeping and related compliance support, contact Raffles Corporate Services at [email protected] or WhatsApp +65 8501 7133. Tell us which records or process need attention so we can discuss the relevant next steps.