This is for accrual-based accounting, which is best for businesses that have lots of invoices and receivables, long-term projects, and you want to match income and expenses to the time periods they actually occur.
Let’s say you’re installing a koi pond for a fancy restaurant’s outdoor area.
Gear wheel – Accounts and Settings
Sales -> scroll to Progress Invoicing -> Turn it on and click save.
Create a ‘nonposting’ transaction. (To get the job on the books but not have it show up on financial statements. Why don’t you want it showing up on financial statements? Because it will affect accounts receivable and making it look like you’re collecting outstanding invoices faster than you actually are.)
Create ‘Estimate’. Select customer. Make the estimate for full sales price. Save. This can make it easier to change later too, like if you’re installing that koi pond for someone and it turns out that it costs 4000 instead of 3500. If you made an invoice in a place that does sales tax for that kind of thing and collected a payment, you’d have to do the math as to how that sales tax changes by making a new transaction for the difference in money received by the customer and how much more you have to pay in tax.
Click Create invoice. -> Collect 50%. Create Invoice. Save. Then receive payment on the same screen for the money you collected.
Collect the rest. Return to estimate. Create invoice -> Remaining total (or whatever they paid next). Add the algae eating fish as a new line (and updating the date) , add new sales tax.