Customer Invoices

This comprehensive guide explains how customer invoices work in your accounting system, covering creation, payment processing, multi-currency support, and revenue recognition. Written for all users — accountants and non‑accountants — it provides practical guidance following double‑entry accounting best practices.

What is a Customer Invoice?

A customer invoice is a commercial document that formally requests payment for goods sold or services provided, creating legal and accounting records for the transaction.

Records a Sale: Documents goods sold or services provided to customers
Requests Payment: Formally asks the customer to pay for delivered goods/services
Recognizes Revenue: Creates accounting entries for income under accrual accounting
Tracks Receivables: Establishes amounts owed by customers in accounts receivable

Accounting Impact: Posted invoices increase revenue and accounts receivable, following the accrual accounting principle that recognizes income when earned, not when cash is received.

System Requirements

Prerequisites

Customer Record: Customer must exist in the system with complete information
Product/Service Setup: Items to be invoiced must be configured in the catalog
Tax Configuration: Tax rates and rules must be set up for applicable jurisdictions
Payment Terms: Payment terms must be defined for customer agreements
Currency Configuration: Invoice currency must be active and configured
User Permissions: Appropriate access to sales and accounting features

Where to find it in the UI

Navigate to Accounting → Sales → Invoices

Customer invoices also appear in:

Create Action: "Create" button for new invoice entry
Customer Records: Related invoices section showing invoice history
Dashboard: Recent invoices and sales summaries

Tip: The header's Help/Docs button opens this guide.

Invoice Status Workflow

Draft Status

Invoice is being prepared and can be freely edited
No accounting impact created yet
No permanent invoice number assigned
Not visible to customer
Can be deleted if no longer needed

Posted Status

Invoice is finalized with permanent invoice number
Journal entries created for accounting recognition
Cannot be edited (use adjustment documents for corrections)
Available for customer payment
Stock moves generated for storable products
Payment installments created based on payment terms

Paid Status

Customer payment received and applied to invoice
Payment state shows as "Paid"
Accounts receivable balance cleared
Transaction cycle complete

Cancelled Status

Invoice has been cancelled before or after posting
Reversing journal entry created if previously posted
Cannot receive payments
Complete audit trail maintained

Creating a Customer Invoice

Navigate to Accounting → Sales → Invoices → Create

Step 1: Customer & Currency Information

Customer: Select the customer from the partner list

Create new customers directly from the invoice form if needed
Customer information includes name, email, contact person, and address

Currency: Select invoice currency

Defaults to customer's preferred currency or company base currency
Multi-currency support with automatic exchange rate conversion
Exchange rates captured at invoice posting time

Current Exchange Rate: Displayed for foreign currencies

Shows the current exchange rate for reference
Will be locked when invoice is posted

Step 2: Invoice Details

Fiscal Position: Optional tax rules based on customer location/type Invoice Date: Date of sale or service delivery (required)

Must not be in a locked period Due Date: Payment deadline (required) Payment Terms: Choose payment conditions (see Payment Terms Guide)
Terms determine payment installment schedule
Affects due date calculation

Step 3: Invoice Lines

Click Add Line to add products or services:

Product Lines

Product: Select from product catalog Description: Auto-filled from product (editable) Quantity: Number of units sold Unit Price: Price per unit (defaults from product) Taxes: Select applicable tax rates Account: Revenue account (auto-filled from product)

Service Lines

Service: Select service item Description: Describe the service provided Hours/Units: Quantity of service Rate: Hourly or unit rate Taxes: Select applicable tax rates Account: Service revenue account

Manual Lines

Description: Enter custom description Quantity: Enter quantity Unit Price: Enter price Account: Select appropriate revenue account Taxes: Select applicable taxes

Step 4: Taxes and Totals

Tax Calculation: System automatically calculates taxes based on:

Product/service tax configuration
Customer tax exemption status
Fiscal position rules (if applicable)

Invoice Totals:

Subtotal: Sum of all line amounts before tax
Tax Amount: Total tax calculated
Total Amount: Final amount due from customer

Multi-Currency Display: For foreign currency invoices:

Invoice amounts shown in invoice currency
Company currency equivalents calculated automatically
Exchange rate locked at posting time

Step 5: Review and Confirmation

Before posting, review:

Customer details and currency
All line items with correct quantities and prices
Tax calculations
Payment terms and due date

Advanced Invoice Features

Multi-Currency Invoicing

When invoicing in foreign currency:

Invoice Currency: Select customer's preferred currency
Exchange Rate: System captures current rate automatically
Company Currency: System converts for accounting records
Exchange Rate Lock: Rate is locked when invoice is posted
Payment Handling: Exchange differences handled at payment time

Example: Invoice customer $1,000 USD when company uses IQD

Invoice Amount: $1,000 USD
Exchange Rate: 1 USD = 1,310 IQD (locked at posting)
Accounting Amount: 1,310,000 IQD
Company reports show both currencies

Payment Terms Integration

Payment terms automatically generate payment installments when invoice is posted.

Standard Terms Available:

Immediate: Payment due immediately
Net Terms: Net 15, Net 30, Net 45, Net 60
Early Payment Discounts: 2% 10 Net 30, 1% 15 Net 30
End of Month Terms: EOM, EOM + 15, EOM + 30
Installment Terms: Multiple payment schedules

For details, see Payment Terms Guide.

Payment State Tracking

The system tracks payment state separately from invoice status:

Unpaid: No payments received
Partially Paid: Some payments received
Paid: Fully paid
Overpaid: Payments exceed invoice amount

Fiscal Position Handling

Fiscal positions automatically adjust:

Tax Rates: Based on customer location
Tax Exemptions: For qualified customers
Account Mapping: Revenue account adjustments
Compliance: Local tax regulations

Invoice Posting Process

Before Posting - Review Checklist

✅ Customer Information: Correct customer selected with valid details ✅ Currency & Exchange Rate: Appropriate currency selected ✅ Line Items: All products/services included with correct quantities ✅ Pricing: Unit prices and totals are accurate ✅ Taxes: Appropriate tax rates applied per fiscal position ✅ Payment Terms: Correct terms selected ✅ Due Date: Reasonable payment deadline ✅ Accounts: Revenue accounts properly assigned

Posting the Invoice

Save as Draft: Save for review and approval
Review: Check all details carefully using checklist above
Confirm: Click "Confirm" to finalize the invoice

⚠️ Important: Once posted, invoices cannot be edited. Use adjustment documents for corrections.

What Happens When Posted

The system automatically:

Assigns Invoice Number: Permanent sequential number generated
Creates Journal Entry: Accounting entries for revenue recognition
Locks Exchange Rate: Foreign currency rate fixed for consistency
Generates Payment Installments: Based on selected payment terms
Creates Stock Moves: For storable products (inventory reduction)
Converts Currency: Amounts converted to company currency
Updates Payment State: Sets initial payment state as "Unpaid"

Journal Entry Created

For a standard invoice, the system creates:

Dr. Accounts Receivable (Customer)     $1,100
    Cr. Sales Revenue                       $1,000
    Cr. Sales Tax Payable                     $100

For multi-currency invoices, amounts are converted to company currency using the locked exchange rate.

Managing Posted Invoices

Payment Registration

From Invoice: Click "Register Payment" directly on the invoice

Select payment journal (bank/cash account)
Enter payment date and amount
Add optional reference
System creates and confirms payment automatically

From Payments Module: Create payment separately and link to invoices Bank Reconciliation: Payments can be matched automatically during reconciliation

For detailed payment information, see Payments Guide.

Payment Installments

Posted invoices automatically generate payment installments based on payment terms:

Single Payment: For simple terms like Net 30
Multiple Installments: For complex payment schedules
Payment Tracking: Each installment tracked separately
Aging Reports: Based on installment due dates

Partial Payments

The system fully supports partial payments:

Register payment for partial amount
Payment state changes to "Partially Paid"
Remaining balance tracked automatically
Multiple payments can be applied
Payment installments updated accordingly

Adjustment Documents

For corrections after posting, use adjustment documents instead of editing:

Credit Notes: For returns, discounts, or corrections

Navigate to the invoice
Use "Adjustment Documents" relation manager
Create credit note for specific amounts
Credit automatically applies to customer account

Debit Notes: For additional charges

Similar process but increases customer balance
Less common but available when needed

PDF Generation and Delivery

View PDF: Click "View PDF" to preview invoice Download PDF: Click "Download PDF" for file download Templates: Multiple PDF templates available per company Email Delivery: PDFs can be emailed to customers (setup required)

Invoice Cancellation

For posted invoices that need to be cancelled:

Cancellation creates reversing journal entry
Invoice status changes to "Cancelled"
Audit trail maintained for compliance
Cannot be undone once cancelled

Invoice Templates and Display

Standard Invoice Information

Company logo and complete business information
Customer billing address and contact details
Invoice number (auto-generated when posted)
Invoice date and due date
Currency and exchange rate (for foreign currencies)
Line item details with quantities, prices, and taxes
Tax breakdown by rate
Payment terms and instructions
Multi-currency totals when applicable

PDF Templates

Multiple PDF templates available per company:

Classic Template: Standard business format
Modern Template: Contemporary design
Custom Templates: Company-specific designs
Template selection available in company settings

Multi-Currency Display

For foreign currency invoices:

Primary amounts in invoice currency
Company currency equivalents shown
Exchange rate clearly displayed
Both currencies in accounting reports

Recurring Invoices

Note: Recurring invoice functionality is planned for future releases. Currently, invoices must be created manually.

Customer Communication

Invoice Delivery

PDF Generation: View and download professional PDF invoices Email Delivery: Can be configured for automatic customer delivery Multiple Templates: Choose from available PDF templates Multi-Language: PDFs respect company and customer language settings

Payment Follow-up

Payment State Tracking: Real-time payment status updates Installment Monitoring: Track individual payment installments Overdue Tracking: Automatic aging of overdue amounts Customer Statements: Generate account statements showing all activity

Note: Automatic payment reminder functionality is planned for future releases.

Reporting and Analysis

Sales Reports

Sales by Customer: Revenue analysis by customer with multi-currency support Sales by Product: Product performance tracking across all currencies Sales by Period: Monthly/quarterly sales trends with currency conversion Tax Reports: VAT/sales tax reporting with proper currency handling Multi-Currency Reports: Consolidated reports in base currency

Receivables Management

Aged Receivables: Outstanding amounts by age with currency conversion Payment Installments Report: Upcoming payment schedules Customer Statements: Account activity summaries in customer currency Collection Reports: Overdue invoice tracking with payment state Cash Flow Forecasting: Expected payment timing based on installments

Multi-Company Reports

For businesses with multiple companies:

Consolidated sales reports
Inter-company transaction analysis
Currency exposure reports
Cross-company customer analysis

Best Practices

Invoice Numbering

Sequential Numbers: Automatic numbering system ensures no gaps
Company-Specific: Each company has its own numbering sequence
Audit Compliance: Sequential numbering required for tax compliance
Draft References: Draft invoices show "DRAFT-00001" format until posted

Multi-Currency Management

Consistent Currency: Use customer's preferred currency when possible
Exchange Rate Monitoring: Review rates before posting large invoices
Currency Risk: Consider hedging for significant foreign currency exposure
Reporting Currency: Maintain reports in both invoice and company currencies

Approval Workflow

Draft Review: Management approval before posting recommended
Credit Limits: Monitor customer credit before large invoices
Pricing Approval: Verify special pricing or discounts
Tax Compliance: Ensure proper fiscal position assignment

Documentation and Audit Trail

Supporting Documents: Link delivery receipts and contracts
Change History: System maintains complete audit log
Payment Documentation: Link payment confirmations and bank statements
Multi-Currency Records: Maintain exchange rate documentation

Common Scenarios

Scenario 1: Standard Product Sale (Single Currency)

Sell 10 laptops at $1,000 each with 10% tax in USD:

Select customer and USD currency
Add laptop product line (Qty: 10, Price: $1,000)
System calculates tax: $1,000
Total invoice: $11,000 USD
Confirm invoice to generate invoice number and journal entries

Scenario 2: Multi-Currency Service Invoice

US customer paying in USD while company uses IQD:

Select customer and USD as invoice currency
Add consulting service lines in USD
System shows current exchange rate (e.g., 1 USD = 1,310 IQD)
Confirm invoice - exchange rate locked at 1,310
Accounting entries created in IQD (company currency)
Customer pays in USD - exchange differences handled automatically

Scenario 3: Complex Payment Terms Invoice

Large project with 30-60-90 day payment terms:

Create invoice with total amount $30,000
Select "30-60-90 Days" payment terms
Confirm invoice
System generates 3 payment installments:
- $10,000 due in 30 days
- $10,000 due in 60 days
- $10,000 due in 90 days
Track each installment separately in payment reports

Scenario 4: Invoice with Early Payment Discount

Encourage early payment with "2% 10 Net 30" terms:

Create standard invoice
Select "2% 10 Net 30" payment terms
Confirm invoice
Customer pays within 10 days - apply 2% discount via adjustment document
System tracks discount as sales discount account

Scenario 5: Invoice Correction via Adjustment Document

Correct pricing error on posted invoice:

Original invoice posted for $5,000
Discover price should be $4,500
Create credit note adjustment document for $500
Apply credit to customer account
Original invoice remains unchanged for audit trail

Troubleshooting

Common Issues

Problem: Cannot confirm invoice - validation errors Solution:

Verify customer has complete address information
Ensure all invoice lines have revenue accounts assigned
Check that invoice date is not in a locked accounting period
Confirm currency and exchange rate are available

Problem: Tax calculation seems incorrect Solution:

Verify customer's fiscal position assignment
Check product tax configuration in master data
Review customer tax exemption status
Ensure fiscal position tax mapping is correct

Problem: Exchange rate not updating Solution:

Check currency rate configuration
Verify rate date ranges
Ensure currency service is properly configured
Contact system administrator for rate source settings

Problem: Payment installments not generating Solution:

Verify payment terms are properly configured
Check payment term lines setup
Ensure payment terms are active
Review payment term calculation rules

Problem: PDF generation fails Solution:

Check company logo and template configuration
Verify PDF service is running
Ensure customer address information is complete
Contact system administrator if templates are missing

Integration Issues

Problem: Journal entries not created Solution:

Verify chart of accounts configuration
Check revenue account mapping for products
Ensure journal configuration is complete
Review accounting period setup

Problem: Stock moves not generated Solution:

Verify products are marked as "Storable"
Check warehouse and location configuration
Ensure inventory management is enabled
Review product stock settings

Payment Terms Guide - Detailed payment terms configuration
Payments Guide - Payment processing and management
Bank Reconciliation Guide - Matching payments to bank statements
Vendor Bills Guide - Managing supplier invoices
Stock Management Guide - Inventory and stock moves

Customer invoices are the foundation of revenue recognition and accounts receivable management. The multi-currency support, payment installments, and adjustment document features provide comprehensive invoice management for businesses of all sizes operating in local or international markets.

#What is a Customer Invoice?

#System Requirements

#Prerequisites

#Where to find it in the UI

#Invoice Status Workflow

#Draft Status

#Posted Status

#Paid Status

#Cancelled Status

#Creating a Customer Invoice

#Step 1: Customer & Currency Information

#Step 2: Invoice Details

#Step 3: Invoice Lines

#Product Lines

#Service Lines

#Manual Lines

#Step 4: Taxes and Totals

#Step 5: Review and Confirmation

#Advanced Invoice Features

#Multi-Currency Invoicing

#Payment Terms Integration

#Payment State Tracking

#Fiscal Position Handling

#Invoice Posting Process

#Before Posting - Review Checklist

#Posting the Invoice

#What Happens When Posted

#Journal Entry Created

#Managing Posted Invoices

#Payment Registration

#Payment Installments

#Partial Payments

#Adjustment Documents

#PDF Generation and Delivery

#Invoice Cancellation

#Invoice Templates and Display

#Standard Invoice Information

#PDF Templates

#Multi-Currency Display

#Recurring Invoices

#Customer Communication

#Invoice Delivery

#Payment Follow-up

#Reporting and Analysis

#Sales Reports

#Receivables Management

#Multi-Company Reports

#Best Practices

#Invoice Numbering

#Multi-Currency Management

#Approval Workflow

#Documentation and Audit Trail

#Common Scenarios

#Scenario 1: Standard Product Sale (Single Currency)

#Scenario 2: Multi-Currency Service Invoice

#Scenario 3: Complex Payment Terms Invoice

#Scenario 4: Invoice with Early Payment Discount

#Scenario 5: Invoice Correction via Adjustment Document

#Troubleshooting

#Common Issues

#Integration Issues

#Related Documentation