Lapasar
Finance & Payments

Advance Payment

Also known as: Down payment, Deposit

An advance payment is money paid to a supplier before goods or services are delivered, often to secure an order or fund initial work.

WhatsApp us rfqme@lapasar.com

Advance payments are used when a supplier needs funds to buy materials, when an order is customised or high-value, or when it is a condition of trade for a new relationship. They give the supplier working capital and commitment from the buyer, but they shift risk to the buyer, who has paid before receiving anything.

Because of that risk, buyers manage advances carefully — keeping them to a reasonable percentage, securing them with a bank guarantee or advance-payment bond, and setting clear delivery obligations in the contract. Advance payments are common in manufacturing, imports and project work, and they are usually deducted from later invoices or milestone payments.

Frequently asked questions

What is an advance payment?
An advance payment is money paid to a supplier before goods or services are delivered, often to secure an order, fund materials or meet a condition of trade.
How is the risk of an advance payment managed?
Buyers limit the advance to a reasonable percentage, secure it with a bank guarantee or advance-payment bond, and set clear delivery obligations and deductions in the contract.

Explore related across the knowledge graph

SolutionB2B Trade Financing & Credit Terms in MalaysiaBuy now, pay on terms — Lapasar offers approved Malaysian businesses credit terms on B2B purchases, so procurement runs without cash-flow friction.SolutionBecome a Lapasar VendorSell to enterprise and GLC buyers through Lapasar's managed marketplace, with fulfilment and payment handled for you.SolutionOffice & Pantry Supplies Supplier in Kuala LumpurOffice supplies and corporate pantry supplier for Kuala Lumpur businesses — wholesale pricing, company credit terms and free delivery on orders from RM1,000 across the Klang Valley.ToolPayment Terms & Working Capital CalculatorSee the working capital freed by extending supplier payment terms.GlossaryAccounts Payable (AP)Accounts payable (AP) is the money an organisation owes its suppliers for goods and services received but not yet paid for, and the team that manages those payments.GlossaryAccounts Receivable (AR)Accounts receivable (AR) is the money a business is owed by its customers for goods or services that have been delivered but not yet paid for.GlossaryCash FlowCash flow is the movement of money into and out of a business over a period, and whether it has enough cash on hand to meet its obligations.SolutionOffice Supplies Supplier in JohorOffice supplies and corporate pantry supplier for Johor businesses — wholesale pricing, company credit terms and free delivery on orders from RM1,000 across Johor.SolutionOffice Supplies Supplier in PenangOffice supplies and corporate pantry supplier for Penang businesses — wholesale pricing, company credit terms and free delivery on orders from RM1,000 across Penang island and Seberang Perai.SolutionOffice Supplies Supplier in Shah Alam & the Klang ValleyOffice supplies and pantry supplier for Shah Alam, Petaling Jaya, Subang and the Klang Valley — wholesale pricing, credit terms, free delivery on orders from RM1,000.SolutionOffice Supplies Wholesale in MalaysiaBuy office supplies wholesale in Malaysia — stationery, pantry and IT peripherals on one managed B2B marketplace with contract pricing, credit terms and delivery across Peninsular Malaysia.GlossaryCash on Delivery (COD)Cash on delivery (COD) is a payment arrangement where the buyer pays for goods at the point they are delivered rather than in advance or on credit.GlossaryConsolidated InvoicingConsolidated invoicing combines many individual orders or suppliers into a single invoice, reducing the volume of documents a finance team must process.GlossaryCredit CheckA credit check is an assessment of a company's financial standing and payment history to decide whether, and how much, credit to extend to it.GlossaryCredit LimitA credit limit is the maximum amount a supplier will allow a buyer to owe on credit terms at any one time.
Back to the procurement glossary

Put procurement theory into practice

Talk to our team about wholesale pricing, credit terms, sourcing support and delivery across Peninsular Malaysia — or explore the marketplace built for Malaysian enterprises.

Request a demoExplore enterprise procurement

Prefer to talk to a real person?

Our team replies fast on WhatsApp and email — no forms, no waiting.

WhatsApp us rfqme@lapasar.com