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What is the Difference Between a Progress Invoice and a Partial Invoice?
For new projects, you want to issue an Invoice as soon as possible. This is because, especially with long-term projects, Expenditures such as salaries are constantly incurred. Typically, you agree with the Client on either partial invoices or progress invoices.
But be careful: Partial invoices and progress invoices are two different things when it comes to form, content, and legal and tax aspects.
(English image not yet available)What is a Partial Invoice?
A partial invoice, more precisely a "final partial invoice," is a full-fledged Invoice that accounts for services already rendered. As with any formal Invoice, all services are listed on the Invoice.
It pertains to a clearly defined partial service, for example, when a campaign measure is completed. Unlike a progress invoice, the service rendered is officially accepted by the Client. For you as a business owner, this means: The (partial) Invoice is not subject to a later final invoicing.
It pertains to a clearly defined partial service, for example, when a campaign measure is completed. Unlike a progress invoice, the service rendered is officially accepted by the Client. For you as a business owner, this means: The (partial) Invoice is not subject to a later final invoicing.
As a full-fledged Invoice, the partial invoice has the same implications as the final Invoice: warranty obligations must be observed. Later, in a potential final Invoice, the partial invoices are not considered.
» Partial invoice through monthly invoicing based on effort in MOCO
» Partial invoice from Proposal in MOCO
» Partial invoice through monthly invoicing based on effort in MOCO
» Partial invoice from Proposal in MOCO
What is a Progress Invoice?
A progress invoice (also known as an advance invoice or interim invoice) is issued in advance, i.e., before completion of the agreed service or partial services.
A progress invoice is issued when no service has yet been rendered or the service already rendered has not yet been accepted by the Client. A typical example is an agreed percentage advance of the total sum, which you invoice at the start of a project.
In this case, the period for potentially asserting warranty obligations has not yet begun.
No discounts apply to progress invoices, as it concerns an advance payment amount.
A final Invoice is mandatory, as the final Invoice (also called the end Invoice) lists all services and the total amount. Previous advances and partial payments reduce the outstanding total amount.
» Progress and final Invoice in MOCO
A progress invoice is issued when no service has yet been rendered or the service already rendered has not yet been accepted by the Client. A typical example is an agreed percentage advance of the total sum, which you invoice at the start of a project.
In this case, the period for potentially asserting warranty obligations has not yet begun.
No discounts apply to progress invoices, as it concerns an advance payment amount.
A final Invoice is mandatory, as the final Invoice (also called the end Invoice) lists all services and the total amount. Previous advances and partial payments reduce the outstanding total amount.
» Progress and final Invoice in MOCO
Conclusion
Do not confuse a partial invoice with a progress invoice. They are very different, not least from a tax perspective (VAT and income tax).
Photo by Possessed Photography on Unsplash
Photo by Possessed Photography on Unsplash
