Managing Invoices and Payments

Invoice Status

Invoices have two status fields, one for controlling its ledger posting, and one for tracking its processing status in your organization. The main status field could go from pending to ready, which causes it to be posted, and then he could be paid or written off. The processing status is an auxiliary status field that is currently used to track whether an invoice has been printed, and it can be used to store additional information such as whether the invoice has been sent, acknowledged, and etc. The processing status has no effect on ledger posting.

Invoice Adjustments

In opentaps 1.4 and later versions, you can also add adjustments to invoices. You can configure your own invoice adjustments and set up their own GL accounts, but opentaps comes preconfigured with three types: write off, cash discount, and early payment discount. The adjustment could be associated with an invoice or with a payment and invoice combination. When the invoice is posted, the adjustment will also be posted to the ledger. If the invoice has already been posted, then when the adjustment is made, it will be posted immediately.

Our convention is that an adjustment with a negative value reduces the open amount of the invoice. For example, if you want to give your customer a cash discount of $10 on an invoice, you should create an adjustment of -$10.

Note that invoice adjustments are not considered part of an invoice total. Instead, they behave like payments on the invoice and are used for discounts such as early payment bonuses and fees such as late payment penalties. A positive adjustment counts towards paying the invoice, a negative adjustment increases the amount owed. If after the adjustment is applied, the invoice outstanding amount minus the adjustments and all the payments become zero, then the invoice will be set to paid.

Finally, please note the following about write-offs:

1. If the invoice status is set to write-off, then an adjustment of the type of write-off is recorded for the invoice for its outstanding amounts.
2. If an adjustment of the type write-off is added to the invoice, then the invoice could still be set to paid if the combination of the write-off and adjustment equals the amount of the invoice. In this case, the invoice will be set to paid with associated write-off adjustments.

Therefore, how do you record the writing off of an invoice would depend on whether you want the invoice to be classified as a write off or as paid. For example, if you are willing to write a small amount of the invoice off, you can add it as an adjustment of the type write off. If however you are writing off most of the invoice, then you should change its status, so that it will be recorded as written off.

Paying the Invoices of a Sub Account

In opentaps 1.4 and later versions, you can receive payments from a parent account against the invoices of a child or subaccount. You need to set up the parent account ID of a child or subaccount when you are creating or editing the account in CRM, and then from the receive payment screen, you can select show child account invoices to show the list of invoices from the child account. This will only show the invoices off the immediate child accounts of the parent account and will not recursively iterate to find the child accounts of child accounts.