Depending on the type of product or service your business offers, you may want to invoice your customer for a deposit or prepayment and accept the remainder of the payment at a later date. This type of transaction is easily captured in Wave!
To account for this, take the following steps:
- From the left navigation menu, choose Accounting > Chart of Accounts. On this page, select Add an Account.
- A menu will pop up. Select the Income tab, and in the search box, enter ‘Other Income’. Once the search populates, click on the Other Income account that appears to rename it, and enter ‘Deposit Holding Account’ in its place.
- Next, go to Accounting > Transactions. If you have already entered your transactions, or connected your bank account, locate the deposit payment income transaction. If you have been manually entering your transactions, click Add Income at the top right of the page to create a new one.
- For this transaction, you may want the Description column to include the invoice number, the Category should be your Deposit Holding Account, and the Account to be the account to which you received the payment.
- Once you invoice your customer (in other words - when you create the invoice in Wave), click the drop-down arrow to the right of that transaction and choose Create Invoice Payment. In the menu, select the invoice to which the deposit or prepayment was made. Next, go to Sales > Invoices and you should see that the Status column for that invoice has updated to Partial.
If You’d Prefer...
For any invoice you send to your customer, they can pay only part of the amount if they choose. If you would prefer a simpler method of receiving deposit payments, you can include payment terms in the Notes field when you create an invoice, simply indicating to your customer that they should pay a certain amount by a particular date, and the remainder by the due date.
An Overdue status will override a Partial status for your invoice, so when you’re creating an invoice for which you have or expect to receive a deposit or prepayment, be mindful of the due date you choose!
If you are accepting multiple payments or deposits for your invoices, you may want to create a recurring invoice instead. Let’s take a look at some examples:
A) You require that your customer pays 50% of the amount owing upfront, and then the remainder after completion.
- Click on Sales > Recurring Invoices and click on Create a Recurring Invoice.
- When selecting the product and amount, make sure that it's only for half of the amount due. Complete the invoice details and then hit 'Save and Continue.'
- Under 'Schedule,' select that this invoice sends a custom amount and repeats twice every day/week/month/year depending on when you require the final amount. Select the start and end dates of when both amounts are due, respectively and hit 'Save.'
- Select how you'd like to get paid and whether you'd like to send the invoices automatically or manually.
- Review and approve the invoice and you're done! The two invoices will automatically generate (if that was selected) and send to your customer.
B) Let's say you need to accept multiple payments for the full amount due. In this case, you'll want to create multiple recurring invoices. Please note: this can only work if the amounts due on each invoice are the same (e.g. 4 invoices for 25% of the amount due).
- Click on Sales > Recurring Invoices and click on Schedule a Recurring Invoice.
- Select that this invoice repeats four times every day/week/month/year depending on when you require the final amount due.
- Select the start and end dates of when both amounts are due, respectively.
- When selecting the product and amount, make sure that it's only for a quarter of the amount due.
- The four invoices will automatically generate and send to your customer.