Partial Invoices
Certain business use cases, like projects or services that extend over a large period of time, require merchants or suppliers to distribute the corresponding payment requests over multiple invoices. To this end, JustOn Billing & Invoice Management allows for creating partial invoices.
Understanding Partial Invoices
Businesses issue partial invoices after particular, tangible portions of a larger project are completed. The amount of a partial invoice covers the exact value of the involved goods or rendered service. That is, a partial invoice is usually issued after the partial delivery. The applicable taxes usually become due once the partial invoice is issued.
Once the complete project is finished, the business issues the final invoice. This invoice summarizes all deliverables of the entire project as well as all related partial invoices and the received payments.
Partial Invoices in JustOn
JustOn Billing & Invoice Management implements partial invoices using the sub invoice type Partial. The related functionality is available when billing arbitrary objects, but not for subscription billing.
The partial invoice is subject to the usual invoice proceedings and business processes, including
- finalization,
- payment registration,
- cancellation,
- dunning,
- any related balance generation, and
- the corresponding bookkeeping data creation.
Info
The support for partial invoices and the related final invoices in JustOn Billing & Invoice Management is primarily designed to comply with German legal provisions.
For details on enabling partial invoices, see Enabling Partial Invoices or Progress Invoices.
Implementation Details
Basically, the creation of a partial invoice is controlled using the ON field ON_Type on the invoice source object. It defines the type of the produced invoice. If this field is set to Partial, JustOn generates a partial invoice.
In addition, partial invoices that relate to one project must hold the same sub invoice assignment key. Using this key, JustOn Billing & Invoice Management associates the partial invoices to the related final invoice. To support this association, the invoice source object must also set the ON field ON_SubInvoiceAssignmentKey.
Implementation constraints
- The PDF output of partial invoices and final invoices (as outlined below) is supported with Liquid templates by default.
- When users manually assign balances to partial invoices using the Register Payment functionality, they must provide a transaction number or payment reference to allow for unequivocally identifying the payment association in subsequent processes.
Workflow
The following sections describe how to work with partial invoices, outlining their behavior and life cycle.
Partial Invoice Creation
Using a properly configured generic invoice run, JustOn Billing & Invoice Management generates a partial invoice if the field ON_Type on the invoice source record is set to Partial.
There is no restriction on how many partial invoices you create to be summarizes with one final invoice – this solely depends on the "project portions" you intend to bill separately. As long as the involved partial invoices include the same sub invoice assignment key, they will relate to the same final invoice. This key is usually passed from the ON field ON_SubInvoiceAssignmentKey on the invoice source record.
Creating partial invoices
Partial invoice creation restrictions
- You must create all relevant partial invoices before creating the final invoice. It is not possible to add a new partial invoice to an existing final invoice, even if the final invoice is still
Draft. - It is not possible to change the sub invoice assignment key of a partial invoice once it is associated to a final invoice, even if the final invoice is still
Draft.
Final Invoice Creation
Using a (second) properly configured generic invoice run, JustOn Billing & Invoice Management generates the final invoice if the field ON_Type on the invoice source record is set to Final. Using the sub invoice assignment key (as passed from the ON field ON_SubInvoiceAssignmentKey on the invoice source record), the software will relate all previously created (and finalized) partial invoices with the same key.
Creating the final invoice for multiple partial invoices
Typically, the final invoice summarizes all deliverables of the entire project. If configured accordingly, the relevant invoice run consequently includes all source records as processed by the related partial invoices, producing the same invoice line items. It may, however, involve other invoice line items as well. This way, the final invoice will charge the exact amount of the project.
Any payments made for the related partial invoices are included as specific invoice line items of the type Sub Invoice. They will reduce the final invoice's grand total, producing a remaining amount left to pay. Consequently, the remaining amount will be the calculation basis for all subsequent processes, including
- installments
- invoice discounts
- dunning reminders
- cancellations
- SEPA orders
- entry creation (JustOn Cash Management integration)
The following example invoice explains the final invoice calculation:
| Pos. | Title | Tax Rate | Tax Amount | Pos Price Net | Description | |
|---|---|---|---|---|---|---|
| 1 | Catering: Food | 7% | 140,00 | 2000,00 | reduced tax, not covered with partial invoice | |
| 2 | Catering: Service | 19% | 285,00 | 1500,00 | regular tax, covered with partial invoice | |
| 3 | Location | 19% | 190,00 | 1000,00 | regular tax, covered with partial invoice | |
| Subtotal Net | 4500,00 | sum of Pos Price Net |
||||
| Tax 19% | 475,00 | sum of Tax Amount for regular tax |
||||
| Tax 7% | 140,00 | sum of Tax Amount for reduced tax |
||||
| Grand Total | 5115,00 | sum of Subtotal Net and tax lines |
||||
| Received Payments | ||||||
| Status | Type | Grand Total | Gross Payment | |||
| Issued sub invoice #1 | Paid | Partial | 1190,00 | -1190,00 | received (gross) payment for partial invoice #1 for pos. 3 (Location) | |
| Tax 19% | -190,00 | tax on partial invoice #1 | ||||
| Issued sub invoice #2 | Paid | Partial | 1785,00 | -1785,00 | received (gross) payment for partial invoice #2 for pos. 2 (Service) | |
| Tax 19% | -285,00 | tax on partial invoice #2 | ||||
| Sub invoice payments | -2975,00 | sum of received sub invoice payments | ||||
| Outstanding | ||||||
| Subtotal Net | 2000,00 | difference between final invoice Subtotal Net and the net sum of received payments |
||||
| Tax 7% | 140,00 | difference between final invoice tax and received payment tax | ||||
| Payment Amount | 2140,00 | sum of Grand Total and received sub invoice payments |
Final invoice calculation specifics
- If there is no payment registered for an issued sub invoice, the software will not create a sub invoice line for this particular sub invoice.
- If there is a partial payment registered for an issued sub invoice, the sub invoice's positions with the highest tax rate are settled first. The remaining amount of the partial payment will then be applied to the invoice line items with the lower tax rate(s). If there is no remaining payment amount for a tax rate, this tax rate will appear as a sub invoice position with the amount
0.
Some use cases may require to recreate the final invoice, for example:
- A certain event in the invoiced project requires to issue a new or cancel an existing partial invoice.
- A customer makes a payment for a partial invoice after the final invoice has been created.
If the final invoice is not yet finalized (status Draft), you can simply delete the invoice and recreate it. If the final invoice is already finalized (status Open), you must cancel the invoice, and then create a new final invoice or clone the canceled final invoice. When cloning a final invoice, JustOn Billing & Invoice Management copies the type and the sub invoice assignment key from the original invoice and assigns the related sub invoices to the cloned invoice.
Bookkeeping Data
JustOn Billing & Invoice Management creates booking details for revenue with each issued partial invoice. This corresponds to the assumption that the partial invoice covers a delivered portion of a larger project – that is, after the particular revenue has been realized (see Understanding Partial Invoices).
The following example illustrates the creation of the related booking details. It uses the following booking accounts:
| Account name | Account no. (SKR 03) |
|---|---|
| Bank | 1200 |
| Revenue | 8400 |
| Taxes | 1776 |
| Debtor | 12345 |
Info
JustOn Billing & Invoice Management produces booking details that are designed for double-entry bookkeeping. This is why each business transaction always involves debit bookings and credit bookings to opposite accounts.
- (1) First partial invoice: grand total
30,00, tax rate19% -
Expected postings
Posting Debit to account Credit to account Amount 1 Debtor (12345) Revenues (8400) 25,21 2 Debtor (12345) Taxes (1776) 4,79 Produced booking details
# Amount Debit/Credit Flag Booking Account Contra Booking Account 1 25,21 H8400 12345 2 4,79 H1776 12345 - (2) Payment receipt (first partial invoice)
-
Expected posting
Posting Debit to account Credit to account Amount 3 Bank (1200) Debtor (12345) 30,00 Produced booking detail
# Amount Debit/Credit Flag Booking Account Contra Booking Account 3 30,00 S1200 12345 - (3) Second partial invoice: grand total
40,00, tax rate19% -
Expected postings
Posting Debit to account Credit to account Amount 4 Debtor (12345) Revenues (8400) 33.61 5 Debtor (12345) Taxes (1776) 6.39 Produced booking details
# Amount Debit/Credit Flag Booking Account Contra Booking Account 4 33.61 H8400 12345 5 6.39 H1776 12345 - (4) Payment receipt (second partial invoice)
-
Expected posting
Posting Debit to account Credit to account Amount 6 Bank (1200) Debtor (12345) 40,00 Produced booking detail
# Amount Debit/Credit Flag Booking Account Contra Booking Account 6 40,00 S1200 12345 - (5) Final invoice: grand total
100,00, tax rate19%, received payments70,00 -
Expected postings (difference between final invoice grand total and received payments)
Posting Debit to account Credit to account Amount 7 Debtor (12345) Revenues (8400) 25,21 8 Debtor (12345) Taxes (1776) 4,79 Produced booking details
# Amount Debit/Credit Flag Booking Account Contra Booking Account 7 25,21 H8400 12345 8 4,79 H1776 12345 - (4) Payment receipt (final invoice)
-
Expected posting
Posting Debit to account Credit to account Amount 9 Bank (1200) Debtor (12345) 30,00 Produced booking detail
# Amount Debit/Credit Flag Booking Account Contra Booking Account 9 30,00 S1200 12345
With respect to the booking accounts, the following postings will be recorded:
- 12345 Debtor
-
Posting Debit Credit 1 25,21 2 4,79 3 30,00 4 33,61 5 6,39 6 40,00 7 25,21 8 4,79 9 30,00 - 1200 Bank
-
Posting Debit Credit 3 30,00 6 40,00 9 30,00 - 8400 Revenues
-
Posting Debit Credit 1 25,21 4 33,61 7 25,21 - 1776 Taxes
-
Posting Debit Credit 2 4,79 5 6,39 8 4,79
Chart of accounts
| Posting | 12345 Debit |
Debtor Credit |
1200 Debit |
Bank Credit |
8400 Debit |
Revenues Credit |
1776 Debit |
Taxes Credit |
|---|---|---|---|---|---|---|---|---|
| 1 | 25,21 | 25,21 | ||||||
| 2 | 4,79 | 4,79 | ||||||
| 3 | 30,00 | 30,00 | ||||||
| 4 | 33,61 | 33,61 | ||||||
| 5 | 6,39 | 6,39 | ||||||
| 6 | 40,00 | 40,00 | ||||||
| 7 | 25,21 | 25,21 | ||||||
| 8 | 4,79 | 4,79 | ||||||
| 9 | 30,00 | 30,00 |
The accounting balance after these transactions would look like this:
| Assets | Liabilities | ||
|---|---|---|---|
| Bank | 100,00 | Equity (earnings) | 84,03 |
| Debtor | 0,00 | Payable taxes | 15,97 |