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An
advance payment, or simply an
advance, is the part of a
contractA contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
ually due sum that is paid in advance for goods or services, while the
balanceIn banking and accountancy, the outstanding balance is the amount of money owed, , that remains in a deposit account at a given date, after all past remittances, payments and withdrawal have been accounted for. It can be positive or negative ....
included in the
invoiceAn invoice or bill is a commercial document issued by a seller to the buyer, indicating the products, quantities, and agreed prices for products or services the seller has provided the buyer. An invoice indicates the buyer must pay the seller, according to the payment terms...
will only follow the delivery. It is called a prepaid expense in
accrual accounting.
See also
- Advance against royalties
In the field of intellectual property licensing, an advance against royalties is a payment made by the licensee to the licensor at the start of the period of licensing which is to be offset against future royalty payments.For example, a book's author may sell a license to a publisher in return for...
- Pay or play contract
- Signing bonus
A signing bonus or sign-on bonus is a sum of money paid to a new employee by a company as an incentive to join that company. They are often given as a way of making a compensation package more attractive to the employee, e.g., if the annual salary is lower than he or she desires...
- Prepaid expense
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