This article is an extract from the book 'Everything you need to know about Xero Practice Manager'
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Methods of invoicing
There are four types of invoices you will raise in XPM:
- Time and cost invoices (with write-offs to be applied to specific time sheets)
- Time and cost invoices (with write-offs to be apportioned across all time sheets)
- Quoted invoices (with write-offs to be apportioned across all time sheets)
- Deposit invoices (write-offs are not applied at this stage).
Deposit invoices (write-offs are not applied at this stage)
With this method we are invoicing based on a percentage of a quote we have raised on the job. If there is no quote on the job, this method will not work. This method allows us to invoice a percentage of exactly what was quoted, rather than messing around with time sheets. So if we have an agreed fee of $2,000 for a cash-flow forecast, and want to bill a 50% deposit, the invoice will be created for $1,000. This invoice will be an ‘interim’, which is a negative WIP entry.
Once you have finished the job, we need to do our final invoice. We can either choose the quoted method, as per above, or do another deposit invoice. If we choose the quoted method, XPM will bring through a negative line item representing the deposit invoice. So it would say:
- Cash-flow forecast $2,000
- Less deposit ($1,000)
- Total invoice $1,000
If you choose to do another 50% progress invoice, just like the deposit, it will treat this invoice as another ‘interim’. So you will have two lots of negative WIP for ($1,000), totalling ($2,000). You will then need to select ‘Remove from Invoice List’ to wash-up this ($2,000) against the time sheet entries.
- Raise a quote on the job for the amount you wish to invoice
- Complete time sheets in XPM
- Raise a ‘New Progress Invoice’
- Select ‘% of Quoted Value’, enter the percentage you wish to invoice, and enter a description in the box provided
- Select ‘Edit Invoice’ in the top right-hand corner
- Update the ‘Job Description’ to say what you would like the invoice to say when it arrives in Xero and hit ‘Save’ (if your quote was set up correctly, you won’t need to edit anything)
- Hit ‘Approve’. This will send the invoice to Xero using the job description from the invoice as the line item description. The revenue stream will be populated from the job category in the job.
Once you have invoiced everything on the quote and the job is ready to be closed, hit ‘Remove from Invoice List’. This will move any unbilled WIP into a write-off. If this job is still in progress, do not hit this button.
These four invoicing methods should cover every scenario you need when billing time-charge agreements in XPM.
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