Applying credit counts as payment, makes P/L report wrong


Thanks for the great software! I am self-hosting on 4.5.17.

Let’s say I offer my clients a support contract, paid up-front for $1000. I issue a $1000 invoice, they pay it, and P/L report shows $1000 revenue which is correct. In order to track my client’s remaining balance, I create a credit for $1000. He then asks for work which costs $100. I create an invoice for $100, then apply his credit for $100, so he has $900 remaining.

Problem is that the $100 apply credit shows as revenue on the P/L report for a total revenue of $1100, which is incorrect since I have only received $1000 in revenue. I don’t think credit application should be considered payments/revenue.

Is there some workaround or am I doing this wrong? Thanks for the help!

Thanks! Yeah… this is a problem with the app. One workaround may be to create a credit note to cancel out the credit. You can create a credit note by cloning the invoice and setting the amount to negative. You can also enable a credit counter on Settings > Invoice Settings.

Thanks for the suggestion! It’s a bit cumbersome but it seems to work as a workaround. If this is something that is planned to be fixed in a patch or version 2, it may be a good idea to make a note for anyone using this method, that they will need to remove all the credit notes before moving to the new version. For anyone else that may run into this, here is what I did.

  1. Issue invoice of $1000 for support contract.
  2. Client pays invoice for $1000.
  3. I add a credit to the client for $1000. At this point, P/L report is still correct.
  4. Issue new invoice of $100 for new work completed.
  5. Apply credit to the invoice to pay it, client’s credit goes to $900.
  6. At this point, P/L report is incorrect at $1100 revenue, because credit apply shows as revenue.
  7. Go to the $100 invoice, clone it, and set the amount to -$100, then save to create a credit note.
  8. Apply new payment of -$100 to the -$100 credit note, with no payment type.
  9. This will “wash” the $100 credit apply so that the P/L report is correct.

Client’s portal will still show correctly $1000 billed, $1000 paid, and $900 credit remaining. They will just see a separate negative amount payment and invoice(credit note) in their list, but that is OK I think.

Thanks for sharing this!

With regard to v2 I’m not sure but we’ll certainly try, this comes up fairly often…