Recurring Invoicing

Recurring Invoicing

The term 'recurring invoicing' refers to a specific type of invoicing where individual packing slips are collected in a summary voucher and posted to the general ledger. The primary reason for recurring invoicing is always a situation where we have a number of packing slips that we do not want to post individually to the general ledger or to the subsidiary accounts.

1. Typical examples of recurring invoicing

The most typical examples of recurring invoicing are:

• Every-10-days or monthly invoicing (we invoice the customer or the supplier invoices us every 10/30 days),
• joint invoicing of several business units,
• successive deliveries.

The general features of a recurring issue document are defined in the Document types register – collective issue, and for a consolidated invoice in the Document types register – consolidated invoice. Examples can be found in collective issue or consolidated invoice.

2. Process of recurring invoicing

Let's look at recurring invoicing using the example of joint invoicing of several business units. The lessons learned from this example can be easily generalised and applied to other cases.

Let's assume that we have Customer A, who has business units BU Ljubljana, BU Koper, BU Maribor. We deliver goods to the Buyer's business units, and for each delivery we issue a packing slip, which is signed by the Buyer's authorised representative to confirm the receiving.

So we have packing slips for a particular period of time:

The above example could be partially optimised by using a buyer/payer pair, but for the sake of clarity we will stick to this setting.

If we post the packing slips directly, we will have the following postings in the subsidiary accounts (we have ignored the tax postings in the example!):

In addition to the excessive increase of postings, it also makes it very difficult for us to check (it is not immediately obvious how much the customer owes us) and to do the work (e.g. closing the accounts).

Recognising the disadvantages of invoicing a large number of invoices with small amounts, we come to an agreement with the customer to invoice them once every 10 days. With each such (consolidated) invoice we capture all packing slips for that customer.

When opening document types, we need to be careful to mark the documents we are consolidating (e.g. packing slips) as internal documents!

In the example above, such a decision results in the issue of two recurring invoices:

which also immediately simplifies posting:

3. Recurring invoicing of different document types

Recurring invoicing is of particular importance for different document types.

The above example is upgraded by specifying that each of the customers is served by a passenger who also carries out mobile sales.

To avoid ambiguity and ensure transparency, each passenger must provide their own numbering.

The simplest way to ensure unique numbering throughout the organisation is to open a different document type for each passenger.

A recurring invoice that takes these document types into account ensures transparent accounting. We assume packing slips as on the list below:

4. Recurring invoicing of different document types

But life has even more complicated cases. In the case of returns (e.g. with newspaper deliveries), we have to deduct the receipts of the returned goods from the total amount from the issued delivery notes, and only charge the net quantity received.

For each passenger in the example above, we open a new document type – a credit note.

We extend the definition of a recurring invoice to include newly opened credit notes.

Even more complicated is the use of recurring invoicing at monitoring sub-contracting production, since we need to be receiving internal issue slips with recurring invoicing.

Recurring invoicing of different document types (receiving/issue) is possible from PANTHEON 4.5 onwards.