Hello,
We agree with my client he pays 30% of my invoice as a prepayment. He asks me to make an invoice for 30% of the total amount. How should I make it correctly?
Should I update my current invoice or make a new one where mentoined this invoice?
Hello @Andriy_Alyeksyeyev
You could
- Credit 30% of the existing invoice (as you would still want to leave 70% outstanding)
- Raise a new invoice for the 30% to send him.
Or
- Amend the old invoice to 30%
- Send him a new invoice for 70%
It would depend on the vat scheme you are on as once reported on a vat return the invoice would be locked and you couldn’t amend it.
Personally I’d go for the first option (credit note 30% and then re-invoice) even if the original invoice is not yet locked, because I don’t like to have multiple different versions of the same VAT invoice out there. My policy is that once an invoice has been sent to a client I won’t change it, so there can be no argument about “well my copy of invoice 12345 says this much…”
Hi Steve and ian_roberts,
I want to go for the first option as well, the invoice will not change but demands partial payments from the client.
How to make it correctly? I mean credit for 30%
Go to the invoice, then at the top under “more options” you’ll find “credit note”. By default this will credit the full amount but you can edit the numbers as required before saving if you wish. You decide whether it’s clearer to credit 30% of the old invoice and then make a new one just for the deposit, or to credit the old invoice in full and then make two new invoices for the deposit and for the balance.
If they’ve already paid the 30% then select the option to hold funds on account, then create the new invoice for 30%, log payment, apply from credit, to use these funds on account to pay off the replacement 30% invoice.
If they haven’t already paid then the credit note will just be to reduce or eliminate the unpaid balance on the original invoice, and the new 30% invoice will make up the difference.
In any case, make sure you send copies of both the credit note and the new invoice(s) to the client.
Just checked, there is no “credit note” under “more option” button, can you suggest another path to find it please?
The invoice is unpaid, the client will arrange his payment after receiving 30% invoice from us
That suggests that the invoice is still “draft” rather than “sent” (or paid or whatever), in which case nothing has been sent to the client so far. So you’re fine to just edit it in place to be 30% of the value, send it to the client for payment, then make a separate invoice for the other 70% either now (with a later payment due date) or later once the work is complete.
Hello @Andriy_Alyeksyeyev
Has the invoice been marked as sent yet or is it just a draft invoice?
Draft invoices are not live and do not affect the ledgers yet and as such would not have a credit option
The invoice is marked as Draft yet.
We have done it for goods, it is important to save the prices and quantities for all the goods.
So, will the best option be - change the Invoice status to Sent and make a Credit not for it?
Hello @Andriy_Alyeksyeyev
In this case, I would reccomend the below as the invoice is not live on your accounts yet
- Amend the invoice to 30%
- Send him a new invoice for 70% remaining
If you’ve got the draft invoice with all the amounts and quantities then maybe you could add an extra line to the invoice for minus-70%, saying something like “Less: balance due on completion”, so you keep all the full prices and quantities but the invoice total is only for 30%. You could add some description lines in between if you want to make it clearer.
Then when the 70% is due make a copy of the deposit invoice and change the extra line on that new invoice to “Less: 30% deposit already paid”. You just have to be careful that the eventual total (net and VAT, if you’re VAT registered) across both invoices matches the actual total from the original draft.
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Steve, Ian,
Thanks for your replies.
This time I decided to go via Credit note, so I`ve changed the Invoice status and make a Credit note then by deducting 70% of each item price and got the amount we need to be payed now.
Our plan for this invoice is:
- get the next payment of 40% of this invoice in about 10 weeks
- get the balance payment in about 6 weeks after the second payment
Please suggest, should I change current credit note before the second payment and delete it before the balance payment to let the client pay certain amounts
or should I make some new documents linked to this invoice?
If this is a regular thing and you want to make things crystal clear you could add notes to the invoice showing a breakdown of the staged payments or simply have line items showing the staged payment amounts and add comments regarding the due dates of each.
Hi,
Yes, that`s our regular way, each invoice will have several payments due to their stages. It seems the way of lined items with staged payment amounts and their dates is the best way for us. Can you please suggest how to make such kind of Invoice?
I wouldn’t over-complicate it. Just create a line item that says “Stage One payment due 01/10/24”, enter the amount and repeat for the various other stages. It would be advisable to reference a separate document (or on the invoice) what constitutes completion of each stage to avoid disputes.
Otherwise, the other alternative which requires more paperwork is simply to invoice at the completion of each stage on a separate invoice. It just depends what your preference is.
It`s clear now, thanks. This way definitely works for us but if the client requires to make an Invoice for exact amount he needs to pay now - we have to follow him and go to credit notes.
Next invoices we will do your way to check if our client can accept it. Thanks
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