Pre-invoice

1

Just as you can enter Billable time and Billable expenses in advance of preparing a sales invoice, it would be nice to be able to prepare an invoice in advance of issuing it.

Use case: My business is a mix of hourly services and flat-rate services. I can enter my hourly services into Manager as I go along and accumulate them until I’m ready to issue an invoice at the end of the month, for example, and in the meantime those billables appear as an asset on my books under Billable time and occupy their own column in the Customers tab.

Similarly, I’d like to be able to enter my flat-rate services into Manager as I go along and accumulate them until I’m ready to issue an invoice at the end of the month (sometimes co-mingled on a single invoice with hourly services, sometimes not, depending on the client). In the meantime, those billable should also appear as an asset on my books somewhere.

Currently, my workflow is to create an invoice for an future date and add the flat-rate line-items to the open invoice one by one throughout the month, but not actually send the invoice until the end of the month. The problem with this, of course, is that the accumulated line-items are not debited to an asset account until the invoice date arrives. Another problem is that if I do it this way, there’s no easy way to add Billable time items to the same invoice later with the accumulated flat-rate items. Finally, there’s no way in Manager to set the invoice-in-progress to some sort of Pending or Unissued status; as a result, the running not-yet-invoiced amount gets included in the Accounts receivable column on the Customers tab (even though it’s not included in the Accounts receivable line on the Summary tab).

Is there a better way to handle this that I’m missing, or is this something that can be enhanced in future?

2

I don’t know of any other way to easily do these things right now beyond what you are doing. But you’ve brought up two distinct issues:

Invoicing billables. I and others have previously raised the difficulty of adding billable time or expenses to an existing invoice. This could be for the situation you describe, @jon, or it could just be that you’ve made a mistake in ticking boxes for items to be invoiced. It is very frustrating to delete and recreate an entire invoice because you forgot one billable hour or expense.

It was a big improvement when invoicing of billables was transferred to the Customers tab. At least now we can pick up both time and expenses. Before, you had to choose which module you would initiate the invoice from and manually add everything else. But I’ve always thought it was important to be able to select and add billables during editing, regardless of where or how the sales invoice is first generated.

Accounting for work in progress. Rigorous accrual accounting would have you recognize revenue as soon as the surrounding economic activity is substantially complete and the price can be determined with some degree of certainty. Completion of a fixed-price service, as you describe, definitely fits that bill. So such work in progress ought to be included in income even before it shows up by sales invoice in Accounts receivable.

My suggestion would be that such items be posted to a work in progress account just as billable time is now posted to Billable time - movement. In fact, they could both be posted to the same account, renamed as Work in progress. The question is where to input them. Do we need a separate Work in Progress tab? I don’t think so.

What if we had single module for Billable Services with the option of inputting time or fixed-price services? Entering a billable service would be equivalent to:

Dr Work in progress (asset account)–this is the current Billable time account
Cr Work in progress (income account)–this is currently Billable time - movement

Invoicing would then do the following:

Dr Accounts receivable
Cr Work in progress (asset)
Dr Work in progress (income)
Cr Service sales

There might be a little trickiness to rolling out the conversion because users might be allocating fixed price services to a separate income account right now than billable time services. How and whether to combine pre-existing accounts would need to be thought through.

Assuming this all works, there would be no need for a pre-invoice. And I think it would probably be much easier to implement.

3

Thanks, @Tut. Great analysis!

The complication you describe with legacy users having separate income accounts for hourly services and fixed-fee services is easily resolved now that control accounts are fully implemented, I think. There can be a control account for WIP with sub-accounts for Billable time and Fixed-fee billable services.

@Lubos, what do you think? Can something along the lines of what @Tut and I have described be added to the Roadmap? As much as I’ve been pulling for Custom Reports and for Job Costing, I would put this even above those as I think it would provide a positive impact for more users and would fit nicely, as @Tut described, into the overall design.

4

This wasn’t my point. I meant that currently, one might have two service sales accounts. One would be the automatic Billable time - invoiced and the other would be a self-created income account for fixed-price services. If the two capabilities are merged, both hourly and fixed-price services could go to a single, Service sales account. The problem I foresee is how to merge the two former accounts into a single, new account.

Or maybe some would want to keep them separate for reporting reasons. Whatever one’s desires, thought needs to be given for whether and how to convert an old accounts structure into a new one.

5

Today I had more ideas. Obviously, if Manager allowed entry of fixed-price services as billable work in progress, you would want to be able to define these services as non-inventory items. The instant you do that, why not allow inventory items as well? Imagine a car repair shop with a fleet service contract that invoices at the end of the month. They might want to enter billable time for diagnosis work, but also defined services at fixed prices like oil changes, and why not enter the oil and filter from inventory, too?

So the tab might be Billables or Work in Progress. First, you would select a customer. Then you would be presented with options for time or regular line items. These might or might not be on sequential screens. This way, you can enter hourly time, and fixed price services, and inventory, or anything else on a custom basis. It would all go the customer’s work in progress asset account and show under Income as work in progress. The inventory items would come out of inventory so they weren’t sold to someone else while waiting to generate the sales invoice. The BS and P&L are both correct all the time, not just after sales invoices are created.

When you convert uninvoiced items to a sales invoice, everything goes to the accounts defined for the items or entered for a custom line item. The billable time destination account would also be selectable, with a default capability. And legacy transactions could, if necessary, be handled by the promised bulk updates via Find & Recode.

What more could you want? :slight_smile: The only question is whether the magic is feasible. To me, it seems like a very slight expansion of the existing Billable Time capability. This would all remain distinct from Billable Expenses, because those are expenses incurred on behalf of the customer, not goods and services sold by the company but waiting to be invoiced. Billable Expenses should never interact with income or expense accounts.

6

This has gotten so complex! All I really want is to be able to enter all Billables – not just Billable hours (which is really what the Billable time module is).

Let me specify the units for my Billables. It might be “hours” (and minutes), it might be “days,” it might be “units” (which is what I would use for flat-rate effort).

7

I may not have described it very well. But I don’t think it’s complex at all–easier, in fact, than specifying units for billable “things.” Those details would already have been taken care of during creation of inventory or non-inventory items. My concept would be to simply use what already exists. When you say, “All I really want is to be able to enter all Billables,” that’s exactly what I mean–all billables.

8

Just a thought: Could I use Sales Quotes or Sales Orders as a workaround to meet this need? Could I, for instance, create a Sales quote or Sales order to record a flat-rate (or other non-hourly) service that I have provided to a customer until I am ready to issue the invoice for that service? Could this be a better workflow than what I’m doing now, which is to create an invoice for an future date and add the flat-rate/non-hourly line-items to the open invoice one by one throughout the month, but not actually send the invoice until the end of the month.

@Tut, any thoughts?

@Lubos, this is becoming a huge problem for me lately. Do you have any plans to address the gap? I have one very active client for whom I bill once a month at a mixed hourly and daily rate. My books are getting very messy as I accumulate both Billable hours (in the Billable Hours module) and billable non-hours (in the Sales Invoices module under a future-dates and not-yet-mailed invoice) for this client.

9

The concept of using a sales order to pre-build an invoice seems workable, though I haven’t tested it. You could convert to a sales invoice when ready. But you are still left with the old problem of not being able to add billable time during editing. Yeah, I know, you can put the time in manually, and laboriously adjust all the billable time entries, but that’s gruesome.

The more I think about it, the more I like the ability to record anything billable: time, non-inventory items, or inventory items. Maybe the tab should be renamed Projects. A field could be included for a project code. That would help enormously when scanning the register of uninvoiced things to create invoices.

@lubos, I don’t really know what you have in mind for job costing, but this seems like it could be a big portion of it.

10

Interesting idea. It’s funny, though, because just today I was cursing a little because of the exact opposite issue: having to scan through the register of uninvoiced thigs to unselect Billible Time items as I create invoices for Billable Expenses. I’ve always found it cumbersome for my particular workflow (bill for time once or twice a month, bill separately for expenses every few days) that I have to sift through the ledger to pick out the time items or the expense items.

Bottom line: For an independent consultant or other service-based small business, the Billable Time module is one of Manager’s most-useful and most-welcome features, and it’s missing entirely from most of Manager’s competitors. Improvements like allowing Billable Time to handle units other than hours, adding Billable Other Stuff functionality for things besides hours (like days, words, or milestones), project- or job-based accounting (already on the Roadmap), streamlining the entry-to-invoice workflow, and handling non-inventory-based receivables more consistently in Receivables and on the Balance Sheet and other reports would really put Manager in a class of its own.