How to create an invoice for a deposit

Steve B

We often provide our customers the opportunity to book our events with a deposit and the final balance at a later date.

I am not sure how to set this up on Reckon where it shows the full amount that customer is required to pay, less the deposit they have to pay and the balance that will need to be paid later.

can someone describe in detail how to do this so that my figures are correct when it comes to the customer balance and the payments they have to make and received etc.

Steve B

It would be great if you can provide written details or a link to some url that shows what you mean with Pending Invoice as non where on it does it say Deposit required or deposit paid?

Kris_Williams

You could setup a item line on the invoice called Deposit and link it to a clearing bank, and then enter a negative figure, no tax code

when the amount is paid it would then be banked as a deposit to the real bank and offset against the clearing bank account

Steve B

Auto correct issue Zappy. Meant to display ‘nowhere’.

yes I do, however it doesn’t really solves my question.

Steve B

Zappy, I do appreciate you providing your cellphone and your time in helping me. I will do my best to try to redefine the problem. At the present moment I would rather communicate online so I have things in writing so I know what I am doing. Phone calls while great, can also lead to misinformation or information that I may forget. In writing I can clearly see (step by step) what I need to do or not do.

As an example only, a customer buys a product worth in total $1,000. We provide an option where they can pay 50% now and 50% in 30 days.

Problem 1: There is no way to show in an invoice the total amount of the purchase and display to the customer that they only have to pay xxx amount of dollars as a 50% deposit.

Problem 2: Anyway I try to do this, the first invoice has to be halved by 50% which makes it then look, when the customer receives the invoice that the total amount of the purchased item is only $500 instead of $1,000

Problem 3: This then means that the customer can come back and say ... no I paid the invoice for $500 and this is what the total was and I paid the total and now there is a $0.00 balance.

Problem 4: When the customer pays the 50% deposit of the example, the actual customer account and any printed statement will show that they have paid the item in full, the invoice will be marked as 'PAID' and the statement and the invoice will show a balance of $0.00

Problem 5: This would be a very wrong way to do the accounting of a purchase.

So the actual problem as stated originally is there is no actual way to provide a customer an Invoice, displaying the total amount of the purchase, that they have to pay a 50% now on the invoice and the remainder in 30 days. The pending invoice does not rectify the 5 problems stated. Even making an item to a clearing bank does not resolve my 5 problems.

Hope this helps with my dilemma. Hopefully there is a way to do this that is good accounting practice.

Acctd4

Hi Steve

Create the invoice for the full amount & apply their 50% payment.

If you don’t already have one, Duplicate your existing Tax Inv template to include the Payments/Credits & Balance Due labels then change the template for the Inv to this one on the Invoice screen. Finally, change the Due Date to when the balance is due.

This will then:

• Reflect the full purchase price
• Show the deposit payment already applied
• Show the balance still payable
• Reflect correctly in your A/R Ageing reports ☺️

Steve B

Hi Shaz,

Thank you for that. I have set it up as you have said, however there are two other issues that have arisen.

Issue 1: The deposit is not yet paid by the customer, so this creates the problem of the invoice looking as if a payment was received. How would I do this to show the customer that they have 7 days to pay the invoice, less the deposit when they haven't actually paid the invoice, however have asked for an invoice for the purchase.

When I did a mock-summary of what you said, and I apply the deposit payment to the invoice it actually makes the balance the customer owes as $0.00

What is the best way to correct these issues.

Steve B

Zappy, as I have said numerous times, the customer, our customers ask us to provide them with a Tax Invoice that shows them the full purchase price of the item they are about to buy and the amount of the deposit they are required to pay.

With that being said, please return back to my more detailed example, as you had asked, which I had posted at "1:15AM" to better understand what my problem is.

I do appreciate your continued support.

Acctd4

Hi Steve

" ... Issue 1: The deposit is not yet paid by the customer, so this creates the problem of the invoice looking as if a payment was received. How would I do this to show the customer that they have 7 days to pay the invoice, less the deposit when they haven't actually paid the invoice, however have asked for an invoice for the purchase..."

If you want it all on the one invoice only, I'd recommend creating the invoice for the full amount & just typing the deposit request in the description eg

"Please note $ XXXX Deposit payable before xx/xx/xx"

Once the deposit is paid - & you've allocated it - you can delete that text & send the customer the (same) invoice now showing his payment & the balance due:

"... When I did a mock-summary of what you said, and I apply the deposit payment to the invoice it actually makes the balance the customer owes as $0.00..."

Not if you make the invoice for the FULL purchase price amount as above ☺️

Make sure you have the correct labels selected when customising your template:

Steve B

Shaz, I see what you are saying and it was what I was hoping not to have to do. Editing an Invoice legally is not recommended. An invoice once given to a customer, cannot be altered in any way or format. This is the law. Similar to a transaction receipt from a cashier cannot be amended or altered once received by the customer.

While what you provided works, it, unfortunately, places me or anyone who changes the transactional lines after giving it to a customer into a little bit of a compromising position.

While it works, I sadly am not comfortable using that process. Maybe Reckon can actually put an option to actually display a deposit component into the invoice.

Thank you for your guidance. Need to find a more appropriate way of doing this.

Zappy the pending invoice did not work for me, although I do thank you for your input.

Acctd4

Steve, you're not changing any transactional lines, purely manually-entered text - If you're that concerned, just leave it on there! 🙄

What on earth do you do if you make a mistake, need to amend the billing address etc ????

For clarity, here's the legal standpoint on it:

Steve B

Hi Shaz,

Legally you are to re-issue a new invoice. It is the law.

If the mistake is found before you actually give it to the customer, that can be edited. The issue arises Shaz, once you have supplied them with the invoice. Any amendments to the invoice is illegal.

Anyway, your input has provided me with something to consider so I will try to find a solution with a few possible scenarios.

Acctd4

Hi Steve

That's not correct. It is most certainly legal & permissible - please see my screenshot above of an article from Lawpath (in Australia) on their website.

You can read the full article here: https://lawpath.com.au/blog/is-it-legal-to-amend-invoices

Steve B

Acctd,

Please read the link thoroughly. As a BAR passed lawyer you are misconstruing what is allowable.

Reference: Generally, it is legal to amend an invoice that is missing information or includes an error. However you should never delete an invoice if this happens. It is important for auditing reasons that you hold onto records, even if they are incomplete or incorrect.

Missing information or an error.

what is being said to change a line of transaction is neither of these.

Reference: Changing invoices that have already been issued 

If the invoice has already been issued to the customer, amending it will require some different steps. 

Reference: “If an issued tax invoice is incomplete or incorrect, it is not valid.”

again it does not mean changing a line of transaction.

Reference: “Despite it not being illegal, it is good practice to be on top of your invoices and ensure there are no errors before sending them out”

again the operative word is “errors”

I will say it again. It is illegal to change a line of transaction from an invoice already issued.

Anyway I am not here to convince you. Please do what you wish to do. For me I confidently know it is illegal to amend an invoice once supplied. And I am not referring to errors as per my post clearly is not referring.

Acctd4

As a registered BAS Agent & 19-yr senior tax consultant, it is often necessary to apply common sense & logic - Of course, if someone is editing & recording different amounts to the invoices being issued, that is indeed fraudulent & highly illegal! Clearly this is not the same as my suggestion.

The purpose of 'amending' an invoice as presented above, would not be an issue under these particular circumstances - certainly not with the ATO or any other relevant/government organisation.

You initially claimed any amendment was illegal which I was pointing out is not the case.

We will just have to agree to disagree 😁

John Graetz

Steve B. I agree with what Shaz has pointed out to you. You are not making any material change to the invoice, i.e. there is no change to the actual cost of the transaction - it remains the same. Rather, you are purely updating the transaction to reflect the payment that has been made towards it. As shown in Shaz's illustration, the Invoice value/total has not changed - it is still the same. All that has changed is that it now reflects an updated position after the initial payment has been received, by virtue of the words "Payments/Credits" and "Balance Due". I have used this same approach myself regularly in the past for a specific business that I was working at.

If you don't want to use this simple approach, for which Reckon has already provided an option/solution, your next alternative step is to issue a Statement, which will reflect exactly the same position. The approach that you adopt is entirely up to you, but I know the way that I would go and have gone.

John L G

Steve B

John thank you for the input. The practice of changing transaction lines is of ill-regard and while I appreciate the continued replies, I have chosen to to follow this as it is poor practice and I would not recommend any one follow that procedure.

Steve B

Now Zappy, it is people like you who make a professional discussion turn to the mash colloquial street jargon.

Square pegs do not fit into round holes. This is obvious. The problem I am finding with you Zappy is you have no interest to offer solutions. Rather you are more keen to make yourself look like King Tut with anyone who chooses to disagree or not follow your alleged instructions. The sheer fact that you seem to reply more when you are in your psychedelic state of “confirmation bias” shows how square you really are.

It is square people that only attempt to make others look inferior and say immature things rather than provide beneficial advice or information in a professional forum like Reckon Community.

So allow me to set things STRAIGHT for those who are square in their mindset. Square pegs won’t fit into round holes. However a genius would realize that if they worked on the problem of the square peg and used their tools of knowledge and sanded the corners and edges than that square peg would actually become cylindrical in shape and actually fit. That is how great people find solutions to challenging situations. Not by using childish words to simply gore their ego.

And Zappy if you wish to understand why this works it is because every shape 2-D or 3-D when reduced to its base stems from a circular point of reference. This is taught in grade school when the teacher is explaining the properties of polygons.

Now Zappy, you can show me and everyone else on the Reckon Community the kind of person you really are by replying with the nonessential nonsense you have been concurrently typing ...

Or you can realize that you are doing no one a service, are showcasing your level of wisdom and move on to greater things as I am sure you probably need to come to terms with.

From me Zappy … I do not seek any more of your Uber deliveries.

Godspeed and hopefully Keep On Smiling.

Graham Boast

Steve.

I think Shaz is on the right track, but I wouldn’t bother amending the invoice.

My suggested process:

initially, use a sales order or an estimate. Put in the body of the invoice the terms - 50% initial deposit and 50% after 30 days.

on receipt of the deposit, covert sales order/estimate to an invoice dated the date of deposit. Receive payment and print out the invoice. As per Shaz’s instructions above, this will show the invoice amount, the due date (make the terms 30 days), and the amount still owing.

Alternatively, you can show the invoice without payments/balance and print either a statement or a receipt from receive payments window. In 30 Days, they pay the remainder, do another statement or receipt.

I think this process works on a number of levels:

• - using an estimate/sales order means you are not recording income until the deposit is paid. If the customer doesn’t go ahead, you just close it off. It is also clearer what you are chasing up as until the deposit is paid you probably don’t have a contractural arrangement, whereas after they have paid the deposit the legal relationship changes
• - there is no income/invoice until the contact is formed by the payment of the deposit.
• - you are not changing the initial invoice.

Graham 0409317366

graham@reckonhelp.com.au

Acctd4

Graeme’s suggestion is a good alternate option Steve ☺️

Acctd4

(Apologies for the spelling error there Graham 🤦🏻‍♀️)

Steve B

Hi Acctd4, Graham,

Thank you for the suggestions. Using a combination of Graham’s suggestions and Kris’ I have found a solution that works and allows me to be comfortable at how to prepare and issue a deposit invoice.

I appreciate the input Acctd4, Graham and Kris_Williams.

Kris_Williams

Glad you worked it out, happy to help