How to handle invoice deposits or pre-payments

SystemSystem Posts: 187 admin

imageHow to handle invoice deposits or pre-payments

If you work with clients on an ongoing basis, or if you're beginning a large project, you may want to accept a deposit or pre-payment from your customer. We'll walk you through how you can easily h...

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edited February 5, 2019 in Help Center Discussion


  • jwillowjwillow Member Posts: 3

    I want to edit an existing invoice payment. It's probably so simple that no one thought to give instructions.

  • zrgravityzrgravity Member Posts: 1

    Will this duplicate the income amount? Is income only shown for the transactions on the income account, or for invoices against the pre-pay liability account?

  • PaulCPaulC Administrator Posts: 71 admin

    Hi @jwillow,
    If you click into a paid invoice record, the 3rd box on the page (above the main body of the invoice) deals with payments. Simply click to edit.

    Note, however, that you cannot edit a card/bank payment received through Wave Payments. That amount is what it is, and can only be changed if you refund the transaction.

    Hope that helps!

  • PaulCPaulC Administrator Posts: 71 admin

    @zrgravity - I guess you're referring to the part of this article about recording an invoice payment from the Customer Prepayments account?
    In that case, no; this will not create a duplicate payment. This is because the initial receipt of funds into the Customer Prepayments account is not treated as income; it is money arriving in your bank account (an asset), but offset by the liability to the customer. Creating the invoice creates records an amount of income, which is initially balanced by Accounts Receivable. Marking the invoice paid clears the Account Receivable with the Customer Prepayment.
    Hope that makes sense!

  • jwillowjwillow Member Posts: 3
    @PaulC This is great, thank you.
  • jared420jared420 Member Posts: 4

    Why cant there just be an option to have a deposit amount due a certain day and the remainder do another set date?

  • Ryan_WRyan_W Administrator Posts: 460 admin

    @jared420 while I respect that this would be convenient, it's tricky to build that in based on how the invoice creation date directly reflects when this income is going to be recorded as an expected payment to your A/R. What you're describing would be better served by having two separate invoices; otherwise, the workflow described in the article is your best bet.

  • jared420jared420 Member Posts: 4

    Yea, my current way is to send an estimate, then send the deposit invoice and then the final balance invoice. I just wish there was a setting to streamline this, making it automatically based on dates or time frames would be great too. Making a refundable deposit would also be great. Could also be as simple as

  • CasaChangoCasaChango Member Posts: 1

    How do you record retainers?
    This is a large amount the customer deposits from which multiple invoices are paid from.
    Where should the retainer amount be recorded, and how is this used to pay an invoice?

  • SamdSamd Administrator Posts: 479 admin

    Hey @CasaChango - right now Wave's invoicing and bookkeeping is targeted towards pay-per-service style invoicing, rather than having a retainer. Deposits, pre-payments, and credits are all things we're looking into making easier on invoices, but right now they require a bit of a workaround to track. Right now to generate a retainer, you could create a retainer liability account in Accounting > Chart of Accounts. You'd record this first as money deposited to your bank account, at which point you could transfer over to the liability account. Once an invoice comes due, you would then transfer the value back to your bank account, and categorize it against the open invoice(s) for that customer in Wave.

  • novicenovice Member Posts: 1

    Hi! As I am very new to Wave, I would greatly appreciate help on the following.

    I have the following scenario in 4 steps:
    1. Customer makes pre-payment for goods
    Dr Cash in transit (cash is with debit / credit card machine provider)
    Cr Prepayment (liability account)

    1. Cash comes to my bank account
      Dr Cash (my bank account)
      Cr Cash in transit (cash is with debit / credit card machine provider)

    2. Customer collects goods
      Dr Prepayment
      Cr Sales

    3. Recording a reduction in inventory
      Dr Cost of goods sold
      Cr Inventory

    I have a few hundred of these transactions in Excel that needs to be uploaded to Wave. Should I upload them as invoices via Wave Connect, which allows me to include the customer name? Or should I upload them as journal transactions if there is a way to upload the customer name as well?

    Please kindly advise on the best and efficient methods to do the above. A step by step guide would be greatly appreciated. Thanks!

  • JamieDJamieD Administrator Posts: 628 admin

    Hey @novice. I think that the best/most efficient way of accomplishing what you are trying to do in Wave is importing/uploading your transactions using Wave Connect. From my understanding, you should also be able to add a customer with the transactions that you are importing into Wave.

    Alternatively, you could technically import invoices into Wave using Connect, which would give you a solid paper trail.. but you will still need to manual create all of the transactions associated with that invoice in Wave (marking them as paid into a money in transit account, categorizing the deposit transaction as a 'transfer from money in transit' account, and also simultaneously factoring in the overpayment).

  • JessiJessi Member Posts: 1
    I operate in an industry where I have to keep the client's money in 'trust' until I have completed the work and only then can I issue an invoice.
    Based on the threads below, my current system is:
    1. Issue an estimate, which I rename as a 'Deposit Request'
    2. Receive monies from client directly into my client account. I mark these transactions as 'Retainer account' under liabilities which I set up under Chart of Accounts.
    3. Complete work and issue invoice, which I record as being paid from retainer account.
    4. Transfer monies from client account to business account.
    Just to confirm:
    - Is there definitely no duplicate in receiving those funds firstly into my client account and then, additionally when it shows up as an invoice payment?
    - How should I mark the transactions where the funds are going from client account to business account. Is it fine just to mark them as 'transfer from account A to B'?
    - When issuing invoice - does it make most sense to convert the estimate/deposit request into an invoice or should I just generate a new invoice?
    - I need to be able to generate a Customer Statement which shows the deposit being received (and held) and then being appropriated once the work has been completed. How can I record that initial deposit from the client so that it will be recorded against his or her name? Can I link it to the estimate/deposit request?
    edited May 16, 2019
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