Deposit & gst in tax invoice


I want to ask and add one new feature in tax invoice if I can. With my job, most of time I send out a tax invoice and ask certain percentage of deposit (like 50%) to get a job underway. And I thought if I have a feature that I can show how much of deposit (exact figures next to total figures) is required with the job then my customers will know how much exactly they will need to pay.

So if I need this feature, I simply click “Deposit” and choose one of “Percentage” or “Exact Amount” like we sometimes do with “Discount” feature.

The other one I want to ask is regarding gst figures.
Currently, when I generate tax invoice, if I put amounts that are tax inclusive and the created invoice shows “total” and underneath, “Includes GST 10%”. And here me and some of my clients got confused. So my suggestion is if we change the word slighly like “Inc. GST 10%” and get it above the “Total” figure that would solve the confusion. I guess this would be a simple modification so I hope this done shortly if everybody thinks this is a better way. Thank you.

  1. Unless the terms of your contract or agreement with a customer entitle you to full payment in advance, you should not send a tax invoice as a way of obtaining a deposit. That distorts your tax liability to the government. You will owe the full amount of tax, even though you have done no work, delivered no goods, and received no money. A better approach is to send a sales quote, retitled as a pro forma invoice. The quote will have no financial impact.

  2. It is very doubtful you will see your deposit idea implemented, not only for the reason outlined above, but because you can accomplish the same thing with a custom field. Manager would have no use for the data, and it has been the design philosophy that such non-essential information be relegated to custom fields.

  3. I also don’t think you will see your modification for tax-inclusive invoices come to be. The prices and amounts on tax-inclusive invoices already include tax, so inserting a tax amount line above the total would create the impression that tax is being added to the amounts appearing on line items. But that would not be the case. If you want a presentation like you describe, don’t check the box and enter tax-exclusive prices. Then, you will have an added tax line that makes sense, because when added to the subtotal, it will yield the total.

I don’t understand this comment at all.
You can send a Tax Invoice, you just don’t select a tax code.

I am sorry you don’t understand this concept, @Brucanna.

Perhaps that is because you focused on only a portion of one sentence and disregarded the rest of the paragraph. Notice that I prefaced my first paragraph with the phrase, “Unless the terms of your contract or agreement with a a customer entitle you to full payment in advance….” In that case, a tax invoice for the full amount would be appropriate. But that is not the situation the other person described. So I explained the distortion of records that would result and the negative impact on current tax liability. The part you apparently did not understand was that, if you invoice for more goods or services than have yet been sold, your reported tax liability will be higher than it should be—a negative consequence for you.

Another reason not to send a tax invoice is that, since the original poster is only requesting a deposit, under the laws of many jurisdictions, no taxable sale has yet taken place. For jurisdictions where partial payments in advance are subject to tax, the tax invoice should specify only the deposit amount (with tax applied), not the full amount of the job, for the same reason mentioned above.

Finally, if you are not going to select a tax code, you should not designate a sales invoice as a tax invoice. Your advice to do that was puzzling.

  1. Well, to be honest my business is in construction site and when we require any payment(deposit or progress payment), I need to send them tax invoice otherwise they won’t pay anything. I don’t see why should not send a tax invoice. No matter it is the invoice in advance or once job is done, invoice is invoice and even I owe full amount of tax in advance, at the end of the day, it’s gonna be the same anyway? And always I can amend or issue a separate invoice/credit if full amount is changed at the end?
    The problem with your concept, seding a sales quote(proforma) is a sales quote and nothing else and that does not allow me to reconcile any payment from clients like deposit or progress payment and to do that I have to create invoice anyway.
    I can still issue tax invoice and write down how much deposit I require to each client manually in the item description or as a note at the end but it’s manual and I have to calculate exact amount to put in so I wanted something an easier way and to be seen well/better organised.

  2. Well you are right but my point was if we have total and then include 10% GST people confuse if the total above already included the gst or for them to include the gst at the end becuase ‘include 10% gst’ is shown underneath. Also when we put figures with gst inclusive, there’s nowhere that describe/show each figures are inclusive gst or not. If it was something like ‘Unit price(inc.gst)’ and ‘Amount(inc.gst)’, that may help little bit but for my point of view the best way is to change the term ‘include gst 10%’ into ‘incl. 10% gst’ and then re arrange ‘incl. 10% gst’ first and put ‘total’ underneath. or just remove ‘incl.gst’ and put total only and say ‘total (inc.gst)’ as every figures above are gst included.

See below for examples.

  1. This is how manager create currently with gst inclusive figures

  2. This is how manager creat currently without gst inclusive figures.

Also it’s good to remove ‘balance due’ when it is fully paid. :slight_smile:

This is a matter of local law, not just accounting. And the additional liability could be large. But, if you like paying the government money you do not yet owe, that is up to you, I suppose.

Manager handles deposits to customer accounts just fine. See

Yes, there is. That is the entire point of the line on the invoice you want to move.

Why? That would create the impression that the customer still owes money.

Are you billing the customer for the work you have done so far using the original quote to define mile stones / amounts?
If so a series of normal invoices for mile stone payments would make sense. None of which would be deposits. Depending on your contractual arrangement the final payment may show the original total with mile stone payments as negative line items and the total showing the remaining final payment

Well you are correct. Except if the particulars of your agreement or concurrence with an a client qualifies you for full installment ahead of time.
A tax invoice for the full amount would be appropriate.

Hi, I face the same situation concerning deposits on a regular basis too. Using a sales quote retitle “pro forma invoice” doesn’t work for me, as we have regularly several projects for the same costumer. If all the deposits only end up on the costumers account you loose very quick the overview of the payments received.

My workaround is the following. I don’t know if this is really correct, but maybe it helps. And if anybody has some ideas to make it more professional I am more then glad to hear about it.

Here we go:

1.) I created 3 invoice templates:

1st instalment
2nd instalment

final payment

2.) I created 3 non-inventory items with the same names The description field reads how much (in
my case) percent is to be paid at each stage.

3.) Creating the first invoice the first line is the description and amount for the whole job. Then I add
lines for all three instalments. Under qty I only put “1” in the line for the 1st instalment and “0” in
the 2 lines for the future instalments. (yes, it still shows the VAT for this smaller amount, but as I
pay VAT only quarterly it is normally fully paid by then)

  1. To calculate the deposit % I click “discount percent” and let Manager calculate it (if you have
    45% deposit type in 55% discount). Now I put the amounts into the unit price column. All done.
    Don’t forget to untick “discount”.

5.) Tick “custom theme” “1st Instalment”

5.) When receiving the payment I can allocate it to the inovice, the invoice is totally paid, but I can
still see how much is still open for the whole project.

6.) Now when it comes to the 2nd or final payment, I use the same invoice (which might not be
absolutely correct, but it works :wink: ). This time I select under “custom theme” “2nd/final payment”
and change the qty from “0” to “1”.
The invoice shows the new open amount.

This is not ideal, but it works for me. (Oh, nearly forgot, I also created a “custom field” drop down which shows the different stages of the invoice.)

Hope this helps.

The creation of pro forma invoices using retitled sales quotes and existence of multiple projects for the same customer are unrelated. You can use special accounts to receive the deposits. See Instead of creating a special account for each customer, create one for each project that involves a deposit. When you receive the deposit, post it to the special account for that job. This will prevent one deposit from being applied to invoices from another.

The sales quote could contain line items for each installment, totaling to the amount for the entire job. Or, you could take advantage of the feature of sales quotes that allows you to Hide total amount. You can include the full price on the first line, the installment prices on subsequent lines, but not have them add together. See If you use this feature, you should probably include a note on the quote telling the customer that XX% tax will be additional, a very common practice. Whichever way you create the sales quote, there would be no financial impact.

As amounts become payable to you, issue sales invoices for the portion of the job you have actually finished, following procedures in the first Guide above. This will transfer deposit amounts to apply against the sales invoice, reducing the balance due (possibly to zero, depending on the balance of the special account and amount of the invoice). The easiest way to generate the sales invoices would be to copy the pro forma invoice (sales quote) to a sales invoice and delete the inapplicable lines. See Do this again for each installment, but delete different lines after copying the sales quote again.

Advantages of this approach are:

  • No temporary overstatement of your tax liability. While your job might be fully paid before the end of a quarter, it also might not be. Why take the chance?
  • No custom themes are required.
  • If they are standard, your existing non-inventory items can still be used to create pro forma invoices.
  • You only enter the data once, in the sales quote, then copy it repeatedly.
  • You are not—as suggested by your step #3—overstating your income. (You wrote that the first line on the sales invoice was for the full amount, then outlined adding additional amounts for the installments. But maybe your description was incomplete.)

You don’t need to do this. Manager will calculate the deposit amounts for you if you type the formula directly into the unit price fields. See This technique can be used with your current workflow or the one I am suggesting.