Invoicing Clients
Client invoices in Design Manager are similar to proposals and POs in that you generate and print an invoice then accept or reject it. Unlike proposals and POs, accepting the printed invoice will post it to your accounting records. Also unlike proposals and POs, once an invoice is accepted you cannot edit it. If you need to change the invoice you simply credit it then make a new one using the corrected information. The credit is processed from the Existing tab of the invoicing window. If you have entered any receipts to pay off the invoice or adjusted the invoice, you will need to void these entries before you can credit the invoice.
To make an invoice, click on the button on the tool bar. This is the access to all operations concerning client invoice. You will see the main invoicing window. Click on the Add Invoice button at the bottom of the window. You should see the invoice tagging window where you can enter a project code. Once the code is entered you will see a list of items that are in the project as shown below:
The items are listed in room location order however any item that is completely invoiced will be moved to the bottom of the list.
To create the invoice just tag the items that you want to invoice and click on the OK button. To tag an item use the left most column labeled Tag and click on the check box in this column to tag an item. Clicking a second time will untag it.
When the computer displays the items it makes a best guess at the amount that you want on the invoice. These amounts are shown in the column labeled Invoice Price*. As a comparison the Price column shows the estimated selling price and the Invoiced To Date column shows the net amount previously invoiced for the item. If you need to change the Invoice Price highlight the item and click on the Override button at the bottom of the window. This will open the override window. Click the red checkbox to allow override and you can then change the price for the item. You will probably have to also change the taxable amount so that the sales tax will be calculated correctly.
To print the invoice, click on the OK button on the tagging window. This will return you to return to the list of new invoices. Now click on the Print / Post button to actually print the invoices listed. When the invoices have printed the computer will ask if you want to accept or reject the invoice. Accepting the invoices will move them to the Existing tab, post them to the accounting records, client’s records and update the project with the invoice information. Rejecting the invoices will leave then on the list of new invoices. From this screen you can also put invoices on hold by un- checking the box in the first column on the left labeled Print/Post. You can later check this box and then print & post the invoice.
Advanced Options – Invoice Tab
From the Company Advanced Options section click on the Invoice tab. This window holds settings that are passed to the project setup at the time a new project is entered. After the project has been entered, changing the setting in the company information will NOT change the settings in the project. The window appears below:
The Title fields are used to change the title of each type of component as it appears on the invoice. The style field is used to specify how the different component types are to be treated and displayed on the invoice. The selections are Combine, List, Total and Ignore. Any component types set to Combine will have its sell price added into the merchandise sell price. List will cause the component type to be listed under the merchandise with a total for that item shown for each type. Total means the amounts will be totaled for the invoice and printed at the end of the invoice in the total section. Ignore means the component type will be ignored on the invoice.
The Pricing fields can be set to Always Proposed, Always Actual or Automatic. These are used during the invoicing process. When you are ready to invoice the client for an item, the computer will come up with a suggested price. You can invoice at the suggested price or override the price for each individual item. The Pricing fields are used to determine how Design Manager arrives at the suggested price. The Always Proposed setting will look up the proposed price and suggest that as the invoice price. The Always actual setting will arrive at a suggested invoice price by looking up vendor invoices and applying the markup % from project specifications. If there are no vendor invoices than this setting will suggest an invoice price of $0.00. The Automatic setting will use the higher of the proposed or actual as the suggested price.
The 11 check boxes are used to determine which things get shown on the invoice. With the exceptions noted below, most are self-evident. None of these settings effect calculations. They are all used to format the appearance of the invoice.
The Unit to 3 Decimals can be checked if you want the unit price to show 3 decimal places for cents. Using 3 decimal places eliminates problems with rounding. If the quantity is 3 and the sell price for the 3 items is $100.00 then the unit price is thirty three dollars, thirty three and a third cents. With 2 decimal places the unit price would show $33.33 which, when multiplied by the quantity of 3 gives an extended price of $99.99 however the invoice would have $100.00 for the extended price. With 3 decimal places the unit price would be $33.333 and when that is multiplied by the quantity you will correctly get $100.00.
The Show Payments can be checked if you want to show the client payments that have been made on the invoice. This check box has no effect on the invoice when it is first generated. It will only show if you reprint an invoice.
The Time Supplement check box will cause an additional detail report to print out with any invoice that includes time entries. The box for Show Time Details will only be available if you set the Style field for time to List. A check in this box means each individual time entry will show in
the body of the invoice itself.
The remarks box is used to include notes to the client. They will print at the end of the invoice and may be edited on each invoice as it is generated. This is a standard description box and you may use all of the text formatting buttons.
Accounting: Posting the invoices will credit the G/L revenue accounts based on the sales categories of the items on the invoice. The client deposit account and A/R account will be debited and sales tax will be credited. In addition the posting of client invoices may trigger a transfer from work in process to cost of goods sold. If any items on the client invoice have vendor invoices associated with them then those amounts will be credited to WIP and debited to COGS. The transaction number for this transfer will be the same as the client invoice number.
Credit a Client Invoice
You may have a situation where an invoice has been posted, then a mistake discovered. You will not be able to edit the invoice once it is posted but you can credit the invoice, then issue a new one with the corrected information.
To credit a client invoice go to the invoice window by clicking on the button. The client invoice window for new invoices will be displayed. Click on the Existing tab at the top. You will now see a list of invoices. Find the invoice that you want to credit and click on it so it is
highlighted. Now click on the Credit button. You may enter a fiscal month and a date for the credit. You may also tell the computer to skip printing the credit if you do not need a paper copy of the credit invoice. If you check the box to Hide On Reports then the original invoice as well as the credit invoice will not show on project related reports. You may also enter a transaction description if needed.
You may get an error message about payments and adjustments on the invoice. If there have been any payments or adjustments on this invoice, the payment or adjustment must be voided before you will be able to credit the invoice.
Accounting: Crediting an invoice will reverse all of the accounting entries made by posting the original invoice. If the credit is made to a fiscal accounting period different than the period to which the original invoice was posted then you may have open A/R items between the two fiscal periods. You should not post a credit invoice to a period prior to the original invoice.
Adjusting a Client Invoice
You may need to adjust a client invoice for one of two reasons. If a client over or under pays the invoice by a few cents the invoice will remain on your receivables until closed out. You can use the invoice adjustment to remove or add these few cents to the balance due there by closing it out. The other case you may need to adjust an invoice balance is when you have to write off a bad debt.
NOTE: Do not use the adjustment when you see a mistake on an invoice. The adjustments do not update the billing information in the project for line items. It only adjusts the balance for that invoice in accounts receivable.
To adjust a client invoice go to the invoice window by clicking on the button. The client invoice window for new invoices will be displayed. Click on the Existing tab at the top. You will now see a list of invoices. Find the invoice that you want to adjust and click on it so it is
highlighted. Now click on the Adjust button and then the Add button. You will see the invoice adjustment window shown below:
The date and fiscal month default to the current day and month. The field for the G/L Account is the account that is to be adjusted. This is not the A/R account as the computer knows to adjust receivables but it needs you to indicate the g/l account that will be the offset to the A/R account. This is often the bad debt expense account. You can enter a description for the entry and then under Adjustment, enter the amount to adjust. If you enter a negative amount the balance due will be reduced and a positive adjustment will increase the balance due. Click on the OK button to save the entry.
Finance Charges
Finance charges in Design Manager are use to create a finance charge invoice to the client when they do not pay invoices on time. You can set which clients to charge, what rate to charge and how many days overdue you permit an invoice to go before it accrues a finance charge.
If you wish to control which clients get finance charges and the charge rate on each you need to make some entries in the client file. If you plan to charge all clients an equal amount you can skip this step.
Click on Glossaries at the top of the window and select Clients. Open the client edit window by double clicking on the desired client. Below is the lower portion of the window:
Fill in the rate you want to use for this client and the number of days until an invoice becomes past due. Be sure to save the changes by clicking on OK. This client will now be included when you check for overdue invoices each month.
To generate the finance charges go to the client invoicing window by clicking on the menu for A/R and select Client Invoices / Finance Charges. The window for new invoices / finance charges should be displayed. At the bottom of this window is a button labeled Fin. Chgs. Click on this button to open the finance charges window shown below:
The Aging Date defaults to the last day of the current month. It is used to determine if an invoice is past due. If an invoice is past due then the finance charge is the balance due on the invoice times the Finance Charge %.
To determine if an invoice is past due the computer will look at the invoice date, the Aging Date above and the Finance Charge Days. If the invoice date is earlier than the Aging Date less the Finance Charge Days then the invoice is past due an a finance charge will be generated. You can select one of two ways to use this window. The first (the default) is shown above. It will look to the client file for percentages and Finance charge days. It will only generate finance charges for clients that have a % and days filled in and have a past due balance, all other clients will be ignored. The other selection will ignore the client file and look at all clients who have past due balances. It will allow you to designate a percent and Finance Charge Days on this window. Finance charges will be calculated using this percent (even if a different percent is in the client glossary file).
When you click on the OK button, the finance charges will be generated. These will be in the form of a client invoice and will appear as new invoices that have been created but not posted on the client invoice window. You should review the charges that have been created then print and post. Each charge will have it’s own invoice number. The finance charge invoice will show each past due invoice and the finance charge for that invoice. When you post the finance charge invoice the computer will create an item in the project showing the amount of the charge and the invoices that were used in the calculation. This becomes a permanent part of the project.
Accounting: When the finance charge invoice is posted the computer will debit the accounts receivable account and credit the finance charge account. No sales tax is calculated for the finance charge invoices. To set the finance charge account go to G/L and select Company Information. Next click on the tab labeled Other Accts. The finance charge account is in the Accounts Receivable section. This is normally set to a revenue account.