Instalment invoicing and milestones

Many agreements are invoiced in instalments: 30 percent at order, 40 at delivery and 30 at acceptance test. In BC you can do a lot with prepayments, but a real invoicing schedule with instalments and milestones is not the same thing. Here is what the prepayment feature can do, how projects help, and which limits you should know. That makes the choice of method important. We also mention what to check in the setup.

Prepayments in standard

The prepayment feature is set up from a sales order or purchase order. On the Prepayment FastTab you specify a percentage, which can come from the customer card and is copied to the lines, where it can be changed. You can instead edit the total prepayment amount in the statistics, and the amount is distributed proportionally across the lines.

You post the prepayment invoice with the Prepayment action. The payment terms for the prepayment are a separate field, and you can compress the lines on the prepayment invoice if they have the same G/L account and the same dimensions.

Several instalments on the same order

Microsoft Learn describes that you can issue several prepayment invoices on the same order. You increase the prepayment amount on one or more lines, adjust the document date and post again. A new invoice is created for the difference between what has been invoiced and the new amount.

When the order is finally invoiced, the prepayments are deducted automatically from the amount due. That makes prepayments a usable solution for instalments, if you raise the amount yourselves each time an instalment falls due.

What a prepayment is not

A prepayment is a payment feature and not an invoicing schedule. There is no list of instalments, dates and milestones on the order, and no reminder when a milestone is reached. Learn does not describe an instalment plan on sales orders, and we have not found one. You have to keep track yourselves of which instalment is next.

Prepayment invoices also require correct setup of accounts and VAT groups. If there is VAT on the prepayment account, rounding can cause errors if some lines require a hundred percent and others do not. Learn suggests, among other things, a separate VAT product posting group for those lines.

Projects and milestones

In the project module you can create one planning line per milestone with the line type Billable. You specify the quantity to be transferred to the invoice, and choose Create Sales Invoice when the milestone is reached. Learn mentions that you can invoice whole projects, tasks or individual planning lines, and that there is a batch job to create invoices for several projects.

Choosing a method

Fixed percentages at order and delivery: use prepayments.
Milestones that depend on work: use a project and billable planning lines.
Periodic payment for a service: use a service contract with an invoice period.
More complex agreements: keep a checklist outside BC, and post one instalment at a time.

Example

A customer orders a plant at a fixed price. The agreement is 30 percent at order, 40 at delivery and 30 after acceptance test. With prepayments, the percentage is set to 30 on the order, and the first invoice is posted. At delivery the prepayment amount is raised to 70 percent, and the next invoice is posted. Finally you invoice the rest, and BC deducts the two prepayments. You have to remember all three steps yourselves, and it can only be managed outside BC, for example in a calendar or a task list.

The idea on our list

The idea Instalment Invoicing is about splitting an order into instalments or milestones. At Addverk we collect ideas for small apps that could close gaps like this. They are ideas we are considering, not something you can download or buy today. The list of 30 ideas is on the Coming up page, and you can see which of them look like what you are missing yourselves.