How to handle invoice deposits or pre-payments

If you work with clients on an ongoing basis, or if you're beginning a longer project, you may want to invoice your customer for a deposit or prepayment, and accept the remainder of the payment at a later date.

How to account for deposits or pre-payments in Wave:

  1. From the left-hand navigation menu, choose Accounting > Chart of Accounts. Select Add an Account
  2. In the pop-up menu, 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. 
  3. Next, go to Accounting > Transactions. 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.
  4. For this transaction, you may want the Description column to include the invoice number. The Category will be your Deposit Holding Account, and the Account will be the account to which you received the payment.
  5. Once you've created the invoice, 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.
  1. From the left-hand navigation menu, choose Accounting > Chart of Accounts. Select Add a New Account
  2. In the pop-up menu, search "Other Income." Once the search populates, click on the Other Income account that appears, and enter "Deposit Holding Account" as the account name. 
  3. Next, go to Accounting > Transactions and locate the deposit payment transaction. If you have been manually entering your transactions, click Add Income at the top right of the page to create a new deposit for this payment.
  4. For this transaction, you may want the Description column to include the invoice number. The Category will be your Deposit Holding Account, and the Account will be the account to which you received the payment.
  5. Once you invoice your customer (and the invoice is created in Wave), go back to the Transactions page and change the category of the original transaction to Payment received for an invoice. 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.

Partial payments

Customers can choose to pay only part of the total invoice amount. You can include payment terms in the Notes field when you create an invoice, indicating to your customer that they should pay a certain amount by a particular date, and the remainder by the due date.

If an invoice is not paid in full by the due date, its status will change from Partial to Overdue.

Installment Payments

If you are accepting multiple payments or installments for your invoices, you may want to create a recurring invoice instead. Let’s take a look at some examples: 

If your terms require that your customer pay 50% of the amount owing upfront, and the remainder after completion

  1. Click on Sales > Recurring Invoices and click on Create a Recurring Invoice.

     

  2. When selecting the product and amount, make sure that it's only for half of the amount due. Complete the invoice details and then click Save and Continue.
  3. 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, and Save.
  4. Select how you'd like to get paid, and whether you'd like to send the invoices automatically or manually. 
  5. Review and approve the invoice and you're done! The two invoices will automatically generate (if that was selected) and send to your customer. 

If you want to accept multiple payments for the full amount due

In this case, you'll want to create multiple recurring invoices. Note that the amounts due on each invoice must be the same (e.g. 4 invoices for 25% of the amount due).  

  1. Click on Sales > Recurring Invoices and click on Schedule a Recurring Invoice.  
  2. Select that this invoice repeats four times every day/week/month/year depending on when you require the final amount due.
  3. Select the start and end dates of when both amounts are due, respectively.
  4. When selecting the product and amount, make sure that it's only for a quarter of the amount due.  
  5. The four invoices will automatically generate and send to your customer.
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