Invoicing Accrual Accounting Sales Deposits

Client deposits using the accrual accounting method require a different invoicing workflow in WorkGuru to ensure the deposits are held in the correct liability account in your accounting system until final invoice is issued. Once the pre-requisites to handle accrual deposits. are setup, WorkGuru provides two ways of invoicing the deposits:

• Pre-requisites
• Invoice Accrual Deposits with Deposit Lines
  • Project Setup
  • Deposit Invoice
  • Final Invoice
• Invoice Accrual Deposits on Existing Billable Lines.
  • Deposit Invoices
  • Final Invoice

Which deposit workflow is best is usually determined by line items you need to display to the client or if you are invoicing actuals or agreed value.

Pre-requisites

• A liability GL account in your accounting system to use for the accrual sales deposits.
• Create a NonStock "Deposit" product, ensuring the alternate GL Sales Account is assigned to the accrual sales deposit GL

Invoice Accrual Deposits with Deposit Lines

Project Setup

Add two billable deposit line items to the relevant quote, project and/or project template:

• Deposit amount with a negative Sell Price value.
• Deposit amount with a positive Sell Price value.

When set up correctly, the deposit line items should not add a cost, or increase the billable value of the project. An example of a project that requires a 50% deposit would be setup like the following:Note: The deposit line items can also be configured with the appropriate tax settings as mandated by your retentions requirements.

Deposit Invoice

From the project's Quick Invoice screen, use the Custom Amount option to only invoice 100% of the deposit line with the positive Quoted value. Update the invoice Description and/or Reference as required to reflect the deposit invoice.Use the X on each row remove the other billable line items.  The only line item required is the deposit amount.Save Invoice, Approve and send to the client as per your normal invoicing workflow. When the invoice is sent through to the accounting system, WorkGuru will correctly code the deposit as a liability on the balance sheet, not revenue.

Final Invoice

From the project's Quick Invoice screen use the Remaining Balance option to invoice 100% of the project billable lines and the deposit line with the negative Quoted value.

Use the X to remove the other deposit line.  Only the billable project lines the negative deposit value are required. This will display the correct final invoice total owing to the client. Update the invoice description and/or reference as required to reflect the final invoice.

Save Invoice, Approve and send to the client as per your normal invoicing workflow. When the invoice is sent through to the accounting system, WorkGuru will correctly configure the project lines as revenue and the negative deposit line will reverse sales deposit liability so everything is recognised correctly on the balance sheet.

Invoice Accrual Deposits on Existing Billable Lines.

Deposit Invoices

From the project's Quick Invoice screen, use the following to create the required deposit invoice value:

• Percentage of Forecast/Quoted function to create the deposit invoice value with the required deposit percentage for all billable lines.
• Custom Amount option to create the deposit value based on Qty, Value or % for each billable line.

Update the invoice Description and/or Reference as required to reflect the deposit invoice.

Expand each billable line item and update the Account Code to the accrual sales deposit GL account.

Save Invoice, Approve and send to the client as per your normal invoicing workflow. When the invoice is sent through to the accounting system, WorkGuru will correctly code the billable lines as a liability on the balance sheet, not revenue. Repeat to raise as many deposit invoices required by the project's scope of work.

Final Invoice

To prepare for the final invoice, edit the project and add a deposit line item.  Tick the Billable check box but leave Quantity as 1 and Sell Price as $0 to ensure no change to the project forecast.From the project's Quick Invoice screen, raise a 100% Percentage of Forecast/Quoted invoice. Update the invoice Description and/or Reference as required to reflect the deposit invoice. Leave the deposit line empty for now.  Click Save Invoice

Click Edit to edit the draft invoice. Update the Price field for the deposit line item with total deposit value to date as a negative value.  This will ensure the foinvoice reflects the correct balance owing.

Save Invoice, Approve and send to the client as per your normal invoicing workflow. When the invoice is sent through to the accounting system, WorkGuru will correctly configure the project lines as revenue and the negative deposit line will reverse sales deposit liability so everything is recognised correctly on the balance sheet.