Creating Deposit Invoices

Do you find yourself scratching your head when it comes to creating a deposit invoice? Don’t worry; you’re not alone. In today’s post, we’ll break down the steps to get you sorted. If you’re an old hand at Partial/Progress Invoicing, feel free to jump straight to Creating a Deposit Invoice.

New to ServiceM8’s Partial/Progress Invoicing feature? Stick around, and we’ll give you the full rundown.

First, a primer on Partial/Progress Invoicing

You may already be familiar with the fact that ServiceM8 has an optional add-on called Partial/Progress Invoicing. This add-on becomes available from the Starter Plan and above. Whether or not you frequently issue partial/progress invoices, we highly recommend you enable this valuable add-on in your system.

Why Should You Care?

Well, let’s say you’ve got a whopper of a job—like a $50K project. Instead of biting your nails, waiting to send one gigantic invoice at the end, why not break it into manageable chunks? Issue five $10K invoices at different stages, and boom! Easier for your client to handle and a smoother cash flow for you. 🤑

The Catch: Unique Invoice Numbers Only Please

All accounting systems require invoices to have unique, non-duplicated invoice numbers. So, if you partially invoice job #123, you can’t use that number again without ServiceM8 throwing a ‘Duplicate Invoice’ error your way.

The Magic of the Partial/Progress Invoicing Add-on

This is where the add-on really shines by doing the following three things when creating a partial/progress invoice:

  1. Clone Wars: It creates a clone of your original job but with a unique number. Our favoured option is to have a letter appended to the end of the original job number. So, your first partial invoice for job #123 becomes #123A, the next #123B, and so on. Plus, the invoiced amount gets auto-deducted from the original job’s total. 

  2. Ready to Roll: The new partial invoice job gets a ‘Completed’ status instantly, which means it’s ready to be processed in the ServiceM8 Invoicing tab.
  3. Issuing the Invoice: You now use the cloned version of the job to issue the partial invoice. This sidesteps the dreaded ‘duplicate invoice’ error. 🙌

Now that you’ve got the gist, read on. We’ll delve into what sets deposit invoices apart from typical partial ones, and guide you through creating them. 

What is a Deposit Invoice?

A deposit invoice is a type of partial invoice, and created using the Partial/Progress Invoicing add-on. But there are some key differences:

Std/Partial/Progress Invoice Deposit Invoice
Issued after the work has been completed. Issued and due before the work is started.
Client pays after the work is completed. Client pays before the work is started.
Created by selecting existing material and labour line items already in the job, or by adding new material and labour line items into the job. Created by using a special material item called PartialInvoice to invoice a portion of the current job total, which can be a fixed or a percentage-based amount (e.g., 25%).

Of course, you may have jobs using a combination of a deposit invoice and a series of partial/progress invoices until the job is considered completed.

Creating a Deposit Invoice

Hopefully you now better understand how a deposit invoice differs from a typical partial/progress invoice. However, a common problem for some is when they first attempt to create a deposit invoice, the deposit amount is not automatically deducted from the original job value. To help you avoid this confusion, follow these steps: 

  1. Activate the Partial/Progress Invoicing add-on

    If you haven’t already, go ahead and activate the Partial/Progress Invoicing add-on in your ServiceM8 system.

     

  2. Check for the PartialInvoice material item

    Next, check that your system has the following item code / material:
    PartialInvoice

    Check this by going into Settings > Materials & Services and searching for an item called PartialInvoice.

    This material item is automatically created after you create your very first partial/progress invoice. If it exists, great – move onto the next step. If not, then create one. The item number should be worded exactly as PartialInvoice. Note the capitalisation of the P in  ‘Partial’, and the I in ‘Invoice’, with no space between the two words.

  3. Create a deposit invoice using the PartialInvoice material

    Use the following Step/Action procedure to create a deposit invoice:
Step Action Comment
1 Open the job card This is the ServiceM8 job from which you want to create the deposit invoice.
2 Click the Quotes & Invoicing tab
3 Click the drop-down arrow next to the Produce Invoice button This opens a drop-down list containing your invoice templates and other options.
4 Click the ‘New Partial Invoice…’ option This option is available after the Partial/Progress Invoice add-on has been activated in your system.
5 Click the ‘Add Material/Service’ option A new material line item is added at the bottom of the current list of materials.
NOTE: This is a key step in the procedure to creating a deposit invoice versus a normal partial invoice.
6 In the Item Code field, type in / select the item code: PartialInvoice As you type the word ‘PartialInvoice’ the item code will begin to auto-populate. Click the material item to complete the auto-population.
NOTE: This is a key step in the procedure to creating a deposit invoice versus a normal partial invoice.
7 DO NOT change the Item Name field Do not edit the Item Name field, do not click the field at all. If you accidentally do, then cancel out of the job card and start again from Step 1.
NOTE: This is a key step in the procedure to creating a deposit invoice versus a normal partial invoice. Editing this field will cause the special PartialInvoice material item to not work properly.
8 Provide an Item Price
(the deposit amount)
In the item price field, enter the value you want to take as a deposit. The amount you enter here will be deducted from the original job.
NOTE: If your deposit is based on a percentage of the original total value of the job, please note that ServiceM8 does not provide a built-in method to calculate a percentage amount. So have your calculator handy to work this out during or prior to this step.
9 Edit the Work Completed I recommend you add a description here for your invoice, e.g, “25% Deposit”
10 Edit / modify other details for the deposit invoice as required, or skip completely This step is entirely optional, depending on your invoice requirements for date, invoice template to use, and if payment is being manually recorded.
11 Click ‘Confirm Invoice’ button This finalises the partial/progress invoicing procedure and generates a clone of the original job with the deposit invoice details you added between steps 1 to 10. The clone job is automatically marked as ‘Completed’ and made available in the ServiceM8 Invoicing/Awaiting Approval tab. Meanwhile, the original job is updated to deduct the value of the deposit from the total. Lastly, a PDF copy of the partial/progress invoice is saved into the original job’s job diary.
12 Add a reference to the Partial Invoice material item name This step is entirely optional. I recommend you edit the Partial Invoice Item Name in the original job to include a reference about the purpose of the partial invoice. In this case, the purpose was for a deposit.

Finishing Steps

From here, you finish up and follow the normal steps to send the invoice to the client. I recommend you head into your ServiceM8 Invoicing/Awaiting Approval tab, find and open the clone job you just created, and send the client the deposit invoice from that job before approving it over to your accounting system.

Conclusion

Deposit invoices can be a little tricky to understand at first because they can be easily confused with standard partial and progress invoices.

However, once you understand the subtleties and the procedure to create deposit invoices, creating them will soon become a breeze.