Hi Gabriel

I am trying to solve a similar but slightly different problem where a PO is provided by a customer for work on multiple projects and I need to track the balance of the issued PO across the projects. 

For your challenge, and I am sure you have thought of it, could you process the prepayment as a payment on account for the client. And then add the pre-paid hours to the project budget and set the project to not allow hours to be booked over budget. 

When the project invoice is raised you can settle it against the cash on account.

Thanks 

Matt

@mbrown30 I’m not sure using a prepayment is OK from an accounting standpoint, since we will be issuing an invoice (for tax purposes, but also because customers want to have one to pay). Also, accounting would need to make sure to check for prepayments before sending the invoices out every month, which is something I’d like to avoid.

My other idea is to build a customization that would look at the balance of a specific account group in the project during billing, and auto-add a line that will credit the amount on the invoice up to the deposit amount - but it’s something I’d like to avoid if possible :) 

Yes, what is the solution?  The AR prepayment document does not have any Project associated to it.

If you create an invoice, then you need to create a Credit memo to offsett the invoice just created.

The Proforma Invoice does not allow Prepayment.

The client requirements are;

1. Create a document to send to customer to pay a deposit.
2. This document should have visibility to the Project. ( AR payments and Prepayments do not).
3. When the Time & Material Invoice is created, then have visibility of the amount of deposit to be applied

Hi @phillipmarotta,

I did not make any progress on this. I came to the conclusion that there is no out-of-the-box solution and that I would like to make custom development. We are managing this manually for now...

What we have done tackling this issue; we initially generate an invoice and change the credit term. We have configured a credit term that allows payments in installments. The installments are then invoices that are generated now but with monthly or annual due dates.

I hope this helps

@mganji I am having a similar issue and curious about your solution with the credit terms.  Do you recognize the revenue upon the generation of each invoice?  Is there a way to have it go to a prepayment account instead?  Thank you

I’ve been receiving e-mails/private messages around this question so I thought I would provide an update on the solution we implemented:

• We're managing this semi-manually.
• We have a RETAINER account group that is linked to a liability account; when we invoice for the prepayment, we link it to this account which creates the retainer balance in the project
• We built a report using Velixo to look at the current prepayment balance, as well as unreleased/unbilled labor entries. This allows us to track projects and flag any project overage, even before the project billing process has been run: 

• We use the pro-forma invoices flow, and have customized the screen a bit. We built two small customizations (highlighted in blue screenshot below): 

One of the customizations shows  the current retainer (prepayment) balance.

The other customization is a time-saving feature that automatically set the quantity/unit price to the invoice total, up to the retainer balance, when adding the RETAINER item to the pro-forma invoice. This way we don’t need to look up the effective billable hourly rate that was used for this project or set it manually on the row. 

This effectively zeroes out the pro-forma invoice, and lowers the retainer upon release.