There are various invoicing options within Eralis Job.
Time and Materials Invoicing
This is based on the job lines that have been entered against the job. The work has been carried out, the costs have been incurred against the job and you want to start billing the customer for the work.
There are a couple of different options associated to the invoicing:
- A pure time and materials based invoice, where the value of the lines will determine the value of the invoice that is raised.
- A fixed-price invoice with under/over recovery or invoicing with pro-rata.
In both situations, the system allows you to control the value that the invoice is raised for. While the line values may come out as one value, the user can manually alter the actual value of the invoice.
For example, if we have line values that come to $9,500, the user changes it $10,000. There is a difference of $500. The system, using the under/over recovery or pro-rata, deals with that in different ways.
- The under/over recovery will add a new line onto the job for $500, to reflect the write-up that has then been incurred for the job.
- The pro-rata option will adjust the selling prices on the lines used to create the invoice until the value of those lines comes out to $10,000. In that situation, the write-up is being attributed to the actual lines being used on the invoice.
It is important to understand that the revenue and costs are recognized immediately with time and materials based invoicing. As soon as you create an A/R invoice, the revenue and costs are reflected in your income statement under the revenue and COGS accounts.
This option is based on pre-defined billing contracts or milestones associated with the job and not the lines that have been incurred. A contract invoice can be raised before the job has been started as no costs are processed out of the invoice. At the same time, no revenue is posted to the income statement; rather, it is posted directly to the deferred revenue accounts within the balance sheets. This allows you to separate the invoicing function and the revenue recognition function.
In situations where there are discrepancies – such as an invoice up-front for a deposit on a job – accounting standards will prevent you from recognizing that as revenue within the income statement. It can be deferred to the balance sheet, then accrued as revenue once the work has been completed.
Consolidated invoicing is a bit of a hybrid model in that it does use the job lines, but not in the same manner as the pure time and materials invoicing. It allows you to work on summarized information, rather than having to deal with a lot of job lines. It offers more flexibility in the presentation of the invoice – you can control how the lines are consolidated, how the information is displayed to the customer, and you have additional controls over the value that is being invoiced.