Advance received and advance paid

Advance received from a customer

It is a liability until you supply.

Bank A/c                        Dr  1,00,000
    To Customer A/c (or Advance from Customers)   1,00,000

When you invoice, the sale is booked and the advance is adjusted against the customer's balance.

GST: on advances for services, GST is payable when the advance is received (issue a receipt voucher). On advances for goods, GST is generally not payable on the advance; it is paid when the invoice is issued.

Advance paid to a supplier

It is an asset (Loans & Advances) until you receive the goods or services.

Supplier A/c (or Advance to Suppliers)   Dr  50,000
    To Bank A/c                                   50,000

When the bill comes, record the purchase and the supplier's balance nets off.

In Hisab Central

Use Receipt (F6) or Payment (F5) against the party ledger. The party will show a Cr (advance received) or Dr (advance paid) balance until the invoice is posted.