For Function Point customers using accrual accounting, deposit invoices are a great way to keep track of pre-billed amounts, or other unearned revenue. When a deposit invoice is synced to your accounting system, the value of the deposit goes into an unearned revenue account. Deposit invoices can be applied to invoices for specific Jobs, at which point the amount applied is recognized as earned revenue.
Note: if you do not use accrual accounting, please use Interim or Final invoices.
Deposit invoices can be added to a Company, Project or Job. Where you choose to add the deposit invoice will affect which Jobs the deposit can be applied to. Deposit invoices added at the Company level will be applicable to all Jobs done for that Company. Deposit invoices added to a Project will be applicable to all Jobs associated with that Project. Deposit invoices added to a single Job will only be applicable to that Job.
Adding the Deposit Invoice
First, find the Company, Project or Job you'd like to add the deposit invoice to. Regardless of where you choose to create the deposit invoice, the process is the same.
Click the Add New button and select Invoice.
You will land on the Add Invoice page.
- Choose Deposit as the Invoice Type
- The invoice date will default to today's date. Change as needed.
- Enter the value of the deposit.
- Function Point recommends not charging tax on deposit invoices.
Note: if you select a tax group to apply, this deposit invoice will only be applicable to invoices with the same tax group selected. Leaving the tax option blank will make the deposit invoice applicable to any Job. If you have questions about this, please contact your customer success manager.
- If you have multiple Offices in FP, select the one that applies.
Click Add Invoice when you're ready.
You will land on the Basic Info page for this newly created deposit. Here, you have the option to change or add more information regarding this deposit:
- Choose to include a Company Contact.
- Choose to enter a PO number if your has client provided one.
- Choose the applicable set of Payment Terms for this deposit.
To add to or edit these terms in your system, you'll need to go to Admin > List Maintenance, and select the Payment Terms list.
- Choose to add a description to the deposit.
- Choose to include any Payment Notes - such as "Thank you for your prompt payment."
To add to or edit these terms in your system, you'll need to go to Admin > List Maintenance, and select the Payment Notes list.
- Decide which Deposit and/or Accounts Receivable Account the deposit should be applied to in your accounting system.
- If you have received payment for the deposit, enter the payment method, amount and date.
Click Submit when you're ready.
The deposit is now stored in your FP system. You can choose to print it, and/or send a PDF copy to the Contact via the Notify Client button. You can also Post and Export this deposit to your accounting software.
You can easily find this deposit and others by going to the Deposits tab of a Company, Project or Job record.
Applying Deposits to Invoices
Once you've completed some work for a Job are are ready to invoice, you can applied some or all of a previously-created deposit to the Invoice.
Start by creating an Invoice as normal. For a refresher on how to create invoices, check out whichever of these articles applies to your invoicing workflow:
Once you've created an Invoice, you'll see the option to apply a portion or all of any deposit attached to the Job itself, the Project the Job is part of, or the client Company.
The Invoice total will decrease by the amount of the deposit that is applied.
If you don't apply the entire value of the deposit, it will be available to use on any subsequent Invoices until the total has been used up.
You can check the remaining balance on a deposit by going to the Deposits tab of a Job.
Applied = What amount of the deposit has been used on any Interim or Final Invoices.
Payment Status = Whether or not the client has paid the value of the deposit.
Balance = This is the payment balance, or the amount still owed by your client or company for this deposit. In the example screenshot above, the payment is outstanding, so the client still owes the full value of the deposit.