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Upfront Invoicing, Advance Payment, Advance on Costs

In this article we explain how to correctly set out a upfront invoice or rather an advance payment or an advance on costs for accounting purposes in Bexio.
Remember!
You must differentiate between the upfront invoicing option and the partial invoicing option offered by Bexio.

Contents

 


 

The Difference between Upfront-Invoicing and Partial Invoicing – an Example

When do you use Upfront Invoicing?

By going through this example with you, I shall explain when upfront invoicing is used:

Example: Your client is buying a house. The developer provides the client with a quote for $500,000. “That’s just a rough estimate,” says the developer before stating, “we’ll see precisely what it all adds up to at the end.”


When do you use Partial Invoicing?

By going through this example with you, I shall explain when partial invoicing is used.

Example: A local community college charges fees of $1000 a month.

The client cannot pay the total amount in one go and wishes to pay in three instalments.


Key Point
The first thing to do is always ask yourself the following: Will a final invoice be issued after the advance payment – if so, then you’re dealing with a upfront invoicing situation. Is the final amount already stated on invoices that have been issued and is said amount split into several instalments? If so, then you’re dealing with a partial invoicing situation.

 


 

How do Partial Invoices work?

In this support section you’ll find out how you can generate partial invoices: Generating Partial Invoices

 


 

How do Upfront Invoices work?

There is no function available in Bexio that you can use to create upfront invoices. Since it is important to always work on projects with the notion of sales tax in mind, it is therefore unadvisable to generate upfront invoices as individual invoices.

 

In order to get around this issue, I recommend you use the following approach:

  1. Generate the order.
  2. The default position is to generate this and label it as “Advance Payment”
  3. Under the ‘settings’ tab in the order itself – select “tax exempt.”
  4. Send this order to the client.
  5. As soon as the client pays this order, the transaction becomes visible within the ‘banking’ area and is ready for comparison.
  6. Generate a customer invoice from this transaction for the contact.
  7. Generate a final invoice and allocate the customer invoice to this invoice.

 


 

Accounting Information (Tips for Trustees)

Transfer across to manual accounting.

 


 

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