Deposit Invoices in Xero
Deposit Invoices in Xero
A common question I am often asked is "what is the best way do to deposit invoices in Xero?"
If you are not using Xero Projects, then Standard Xero does not have a way to link together multiple invoices to one project.
There is a work around.
Firstly, i do recommend you generate 1 invoice for the whole amount and send it to the client with an explanation asking only for the deposit amount. You won't be able to write the amount of deposit on the invoice as a line item, but you can write it as a description item, with no amount. Here's an example:
If you do it this way, when your client pays the deposit you can reconcile by doing a "Split" and the invoice will remain in your awaiting payment tab showing the amount still outstanding. I think that's a good thing.
Another option is to create an Advanced Invoice Template which is labelled "Deposit Invoice" and has a section which prints each time explaining the % of deposit required, and the terms around that. If you do it this way you will not be able to change the text or the % each time. Here's an example of what an Advanced Invoice Template might look like:
If you're really wanting to push the envelope, it is possible to have an Advanced Invoice Template with a data field you can fill in each time with the specifics of the deposit. There is only a very limited number of fields that can be used, including the Reference Field and also some Contact address fields which you might not be otherwise using. Basically you would be hijacking a data field which was designed for one purpose, and using it for another purpose. But it does work. The usual field I would use is the Delivery Address of the Contact. This is because these data fields are accessible when you create a new invoice using "New Invoicing" in Xero. Here's where you enter in the information when you create a new invoice:
And here's what the template code would look like (Contact Physical Address Lines - in purple):
And here's what it looks like when it prints:
The alternative is to do two separate invoices and somehow link them with the same reference for example. This has the advantage of being able to write the amount of the deposit as it's own line item. But, unless you create an invoice for the amount still outstanding you won't have a quick way of seeing that.
My suggestion is to use one invoice only. If you must write the deposit as a line item, then subscribe to Xero Projects which will allow you to group invoices together under a project name.