Create partial final invoices and distribute advance payments
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Ilko Mauruschat
In projo, the preparation of a partial final invoice (TSR) apparently requires a contract division at the moment and then final invoicing for the assigned part of the contract. This can lead to difficulties (if I have not done this incorrectly so far) in assigning advance payments already received to the various contracts. I suggest that the option of partial final invoicing be integrated into continuous invoicing instead. For certain services/service phases/service groups, which are provided in total 100%, can be marked as “partial calculation” in the contract structure. When creating an invoice, it should be possible to create a “partial bill” from this without the need for a technical division of the contract (for security withholding with TSR, see my other feature request from today). When preparing the TSR, it should also be possible to select which of the advance payments already received will be credited against the TSR — and an advance payment should also be able to be distributed.
Background and example:
The current public sector contracts for LP 1-9 provide for the option of submitting partial final invoices (TSR) in accordance with LP 4 and LP 8 (or after handing over the building). At the moment when the requirements for preparing a TSR are met, further services have usually already been started and advance invoices have been issued for them. For example, when LP 4 is completed, i.e. the building permit has been issued, LP 5 is often already in full swing and advance invoices have already been paid on it. The same may apply to self-completed supplementary services, which may be calculated individually in part. In these cases, it may be necessary to distribute deductions that have already been paid among the accounting flows. A simple example: An architect receives 50,000 EUR for LP 1-4 and 60,000 EUR for LP 5. With a first advance invoice, he settled 90% LP 1-4 and 20% LP 5 as the benefit level, i.e. received an AZ of 57,000 EUR (45,000 + 12,000). After receiving the building permit, he would like to partially calculate LP 1-4 with the total fee of 50,000 EUR. The advance payment, which was higher, must therefore be distributed, usefully, e.g. in such a way that 50,000 EUR is deducted for the partially calculated benefits, so that the TSR itself = 0.00 EUR, and the remaining payment of 7,000 is offset against future advance invoices for LP 5 ff. This does not seem possible in Projo at the moment or is only possible with “detours”. A division of contracts in projo also does not correspond to the actual circumstances, because the contract with the AG is not actually shared by TSR.
In addition, it would be a “nice-to-have” feature if further advance invoices refer to the services that have already been calculated in part. For example, by greying out the partially calculated benefits or presenting them in italics with the explanatory text: “with Rg. No. XXXX partial final calculation” or with a presentation in an additional attachment “Partially calculated benefits” or similar, so that the billing of a contract remains comprehensible even after several project years and possibly changing employees on both sides.
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Ilko Mauruschat
Continuation: ..2/2...
c) About your idea of operating errors when “mixing” the services. I do not mean here that you should mix the partially calculated benefits with current benefits, but only that you have a “reminder” of these benefits. The old services could simply be listed as messages, without stored or even activatable settlement values (just as the payments based on the final calculated amount only appear as messages, but no longer influence the calculation (in Excel, I would simply delete the values from the cells)). Or just - if I follow your idea of the virtual division of contracts in Projo - the continuing part of the contract could attach a message attachment in which the services and payments that have already been calculated in part are listed.
d) And one last thought: In my opinion, this topic is a very important part of billing software for architectural services and it is important that it works reliably because a final invoice that has been made incorrectly can usually no longer be reversed. So I assume that other billing software also had to develop solutions for this and maybe it would be exciting to hear whether colleagues from the user group who used another program in the past can report on how the competition solved it.
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Ilko Mauruschat
Hi Arne, thanks for your thoughts on this. I have the following thoughts about this:
a) It may be legally correct if a partial final invoice amount is then (regularly!) appears as a credit note. But this does not make it easier to communicate the invoice and I would like to predict that this is incomprehensible to the majority of my customers and will always result in considerable explanatory work that I would like to avoid. And if the customer then wants a change and you have to explain that this is not possible because the billing program cannot present it in any other way...? ... not so nice.
b) I still think that it remains a contract legally, that “sharing” the contract in Projo would then only be a technical workaround. In my opinion, the “sharing” of the contract in the case of a partial final invoice is not self-explanatory. But if this is not technically feasible otherwise or can only be implemented with considerable effort, then my suggestion would be that the “sharing” of the contract may be carried out automatically in the “background”; - i.e. the partially calculated services are “automatically” moved into an “old” contract. That would certainly be in terms of error-free operation of the program. At the same time - in order to avoid the above discussion with customers - it should be possible to divide the payments made accordingly - possibly also in installments - among the shared contractual services. This could be done, for example, through a query during the division process or, best of all, remain adaptable until the draft invoice is “focused”. The division of payment amounts should appear as a note in the invoice text.
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Arne Semmler
Hi Ilko, thanks for your detailed description with practical examples. The process described by you would have something similar to the current division of contract, because here too, advance payments already received are settled - of course, this usually results in a negative partial final invoice, which is issued at the same time as a correspondingly higher advance invoice for the following services that have not yet been finally invoiced. As far as I know, this is completely correct in accounting terms, but may not always be immediately understandable to builders (“But I want it differently...”). I have also done it this way in principle, the invoice in projo is then absolutely clean and the partial final invoice often ends with a credit note when more benefit value has already been settled in the following services than the security deposit on the partially calculated services is worth. In my opinion, this is a clean path from a legal and accounting point of view - and whether or not final payments really belong in consecutive invoices and whether there is actually a 21.AZ or a 1st AZ after a 20th AZ and a TSR there is actually a 21st AZ or again a 1st AZ.
However, I am not really sure whether the method of mixing final and ongoing services suggested by you will really be easier to use. Especially since there is also a risk of inadvertently returning the status of partial final calculation to continuous (and this wish will come...; -))