Advance Payment
Advance payment is a financial arrangement where a payer provides funds to a recipient before goods are delivered or services are performed. It is commonly used in business transactions, contracts, and e-commerce to secure commitments, manage cash flow, or mitigate risks for suppliers. In software development, this concept often appears in payment processing systems, subscription models, and financial applications.
Developers should understand advance payments when building e-commerce platforms, subscription services, or financial software to implement secure payment workflows, handle pre-orders, or manage escrow-like transactions. It is crucial for ensuring compliance with accounting standards, reducing fraud risks, and improving user experience in applications involving upfront payments, such as SaaS products or custom development projects.