We are thinking of invoicing our customers at the beginning of the year for the total amount due, but our customers pay on a monthly payment plan. Is there anyway to invoice, so that the invoice shows each month, but not due until that month. eg. The total amount is $3000 but they pay over 10 months ie $300 per month is owing.

I assume you could enter each invoice item and then change the description and the date, but that would take forever. Is there another way? We do not have the inventory or order entry module as this is a service that we are offering.
Thanks

In Adagio you can copy batches changing the date each time. Could should be able to create the first batch for $300 and then copy it 9 times.

I don't recommend billing the total amount for the year up front, unless there is a bona fide accounting reason to do it, such as wanting to record the revenue (or deferred revenue) in month 1.

If the reason is to save on data entry effort, then Doug's suggestion about copying invoices is a better option.

The problem with billing up front is that making adjustments is extremely painful, and customers are always making changes throughout the year.

One thing Adagio can't do is to have multiple due dates on one invoice. It would be a really nice feature - I have some private school clients whose tuition (and other miscellaneous fees) is due at set times, and they can never get a true overdue aging.

Hi Steve Schwartz,

While I know that Adagio does not support multiple due dates on an invoice, why is the aging not accurate when you create multiple invoices (ie create 10 post dated invoices for a 3000 bill)?

Not only can you copy invoices but also entire batches. This would be useful if you have many customers who have the same billing schedule - just set up the first months invoices for all customers, then copy the entire batch for the other 9 months.

I suppose posting future-dated invoices and their respective due dates is easy when the due date is calculated based on the invoice date, but a little more difficult if the due date is specific and independant of the invoice date. In that case, the invoice date would have to be 'tailored' so that the correct due date is determined (ie invoice date = desired due date or 30 days less than desired due date).

Yes, aging is accurate if you create multiple invoices, but that is not a good workaround. Here's a real life scenario.

My private school client bills for tuition. It can be paid immediately, or in two, four or ten installments. They also credit for scholarship grants and for loans, using the same payment plan as that selected for tuition. There are added complications, but let's leave it at that.

A family with two students enrolls, chooses the ten installment plan, and is granted a scholarship and a loan. Under your multiple invoice scenario, 10 invoices and 20 credit notes must be created. Not a big deal, the copy feature works OK.

Before the school year starts, one of the siblings drops out, forfeiting the deposit. All 30 transactions must be adjusted.

A month later, the family decides to switch to paying under a four installment plan. All 30 transactions must be zeroed out, and 12 new ones created.

Assuming the AR clerk knows what to do and is accurate, we are still looking at a daunting task, for what should really by quite simple. And this is not a far-fetched scenario - out of a school with 300 billing units, approximately 20 end up making these kinds of changes. And this doesn't even count last minute adjustments to scholarship grants and loans.

Multiple invoices is not a workable solution in most cases.

Hi Steve Schwartz,

OK - I understand that this would be some significant, mostly mechanical work, for the A/R person.

But how would having multiple due dates on an invoice improve the situation? Would the same ampount of work have to be done on the transactions posted into Receivables?

No it would be less work, if you implement this feature by allowing the due dates and amounts to be modified on screen. There would be no re-posting of additional transactions, no GL implications, no possible modification of original or current balances.

It's sort of like modifying an AP due date by using Payment Control (easy) rather than adjusting the invoice (hard).

While I am on the subject, clients who need the multiple due date feature also need the ability to display invoices on a statement with four numeric columns - the original amount, the payments/credits applied, the balance due/overdue, and the remaining balance not yet due. There would be no need to show payments/credits separately unless they are unapplied.

Hi Steve Schwartz,

By "no GL implications" - wouldn't it be true that you'd be recognizing the revenue totally when the invoice is issued - while it would be more accurate to recognize the revenue as the service is performed?

Anyway - thanks for the insight.

Yes, the accurate way to record revenue is as the service is performed. But due dates are not a good proxy for services performed.

Tuition (or membership fees) should be coded to a deferred revenue account (a liability account) in full at the time of invoicing, and then moved gradually to revenue via GL journal entry as the the revenue is earned. It's the mirror image of prepaid expenses, such as insurance, which are gradually expensed via GL journal entry.

Adjusting due dates in AR should have no GL implications.