The concept of invoicing is not unique to XenDirect. It is a standard element of basic accounting. The concepts in this support article are basic and true for most accounting purposes. Xenegrade does not specifically recommend one method over another when it comes to accounting principles. Users should consult with their administration for details about the accounting methods used within their organization.
What is an Invoice?
An invoice is a list of goods or services provided to a customer, with a statement of the sum due for these goods and services. In XenDirect, the customer is the client. All invoices must be attached to a client. However, a client invoice can be made payable from a Company.
- The goods and services are called invoice line items. This is the same terminology used in XenDirect. The sum of the amounts becomes the Invoice Amount Due.
- Debit line items increase the amount due for an invoice.
- Credit line items decrease the amount due for an invoice.
- Sample debit line items: fees, tuition, textbooks purchases.
- Sample credit line items: discounts, returns.
What is the Balance Due?
The balance due for an invoice is the Invoice Amount Due less any payments made on the invoice. Balance due is not a recorded value. Instead, the balance due is calculated each time it is called to display on the screen or in a report.
If the Invoice Amount Due = $539 and no payments are made on the invoice, the Balance Due = $539.
If payment is now made for $400, the Invoice Amount Due = $539, but the Balance Due = $139.
How do I Balance an Invoice?
There are only two ways to balance an invoice:
- Add or adjust invoice line items
- Add or adjust invoice payments
In XenDirect this can either be done manually by adding or adjusting individual records or by using any of the workflow functions that assist with these two processes. The Invoice Amount Due should always match the amount due by the client. The Balance Due should then reflect the Invoice Amount Due less any payments made to the invoice.
How do OnAccount Transactions affect an Invoice?
In XenDirect, OnAccount Given transactions have no effect on an invoice. Basically, when OnAccount Given is issued, no money has changed hands or been transferred. The Invoice Amount Due and Balance Due are still the same.
For OnAccount Used transactions, these transactions are considered as a payment and would reduce the Balance Due of an invoice. In essence, the OnAccount Used transaction is a transfer from funds that are being held in an account and are now being used back towards a purchase.
How do Refund Transactions affect an Invoice?
A refund transaction is basically returning money back to a client. This means some portion or all of a client's payments were handed back to them. After the refund, the Balance Due calculation occurs again increasing the Balance Due. However, the Invoice Amount Due has not changed.
Example:
Invoice Amount Due = $539
Payment = $539
Balance Due = $0
Refunded Payment = $139
Remaining Payments = $400
Invoice Amount Due = $539
Balance Due = $139
After the refund, because there is now a Balance Due again and no more payments are expected, the invoice must be modified to reduce the Invoice Amount Due. This is done by adding or adjusting invoice line items either manually or using a XenDirect workflow.
Rick Stern
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