Payment can't be applied to a credit note

Self-Hosted | v5
#1

Hi,

Manually entered (positive) payments are listed as “Unapplied” and can be applied to an invoice after they have been created. This is working like expected.

But when I create a negative payment, so I as a company pay my client, the payment is listed as completed and cannot be applied to a credit note anymore. To me this looks a bit broken.

Video-direct-link

When I open a credit note and try to enter a payment for the credit note, I says: The credit amount cannot exceed the payment amount

I doesn’t matter if I enter the exact same amount of the credit note in +227,56 or - 227,56 or any other amunt less than that. Also using a dot or a comma as a decimal separator didn’t make any difference.

Video-direct-link

I tried this both in my own installation as well as on demo.invoiceninja.com

It looks like a bug.

Thanks,
Gijs

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Is invoice Ninja comform with the German GOBD?
#2

Hi,

v5 doesn’t support negative payments, to pay your client you can create a credit

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#3

Hi Hillel,

That is a bit suprising for me.

In v4 it was possible to create an invoice with negative unit costs and it would automatically become the next available number out of the credits number range.
Positive total sum -> invoices number range
Negative total sum -> credtis number range

In v4 you can mark the credit note as paid or create/add a negative payment linked to the credit note.
The Credits menu in v4 lets you create a credit like a deposit and you can apply it later to an invoice.

In v5 invoices and credit note are split up in two separate menus and both have a different number range and you can also set two different pdf designs (where in v4 invoice and credit notes would use the same design).

You are still able to create an invoice with a negative total sum but it will not get a number from the credits number range but just the next available invoice number. So in case I would need to create a credit note, I would always do it via the Credits menu in v5 and not as a negative invoice.

A “v4 credit”, like a deposit, is made by a payment. If I would like to create a deposit, I would just enter a manual payment. That payment can be applied to future invoices of that client.

Invoices in v5 can be mark as paid or I can create a payment which is linked to the invoice. But for credit notes, I can’t add a payment and there also isn’t an option to mark them as paid?!

The table below eventually makes it a bit clearer (assuming I understand it correctly)

Type v4 menu v4 functionality v5 menu v5 functionality
Credit note Invoices Any invoice with a negativ unit cost/price will automatically become a credit note. Credits Create a credit note similar to an invoice by creating an entry at “Credits > New credit”
Credit / Deposit Credits A credit can be entered with just the client and the amount. From the credit menu, you can apply the credit to an invoice. Payments Create a payment. It can be applied to an invoice later on.

Does this make sense?

Thanks a lot,
Gijs

#4

Yes, that’s correct.

The problem with v4 is that there was no connection between a credit note (negative invoice) and invoice, the credit note was just applied to the client’s balance. With v5 we now support applying a credit to a specific invoice which has been a common request.

#5

Hi Hillel,

I am not sure if I understand you correctly.

What do you mean with “credit” in this sentence? Credit note or a (manual) payment?
If credit note, how do I aplly/connect a credit note to an existing invoice? I couldn’t find an option for it in the app.

And how to refund a payments? For example: an invoice has been paid for by PayPal or Stripe. Then it turns out that the job was done much quicker as planned and the client get some money back. So I would create a credit note but can I then sent a refund via PayPal or Stripe through InvoiceNinja and would the refund be stored as payment at the credit note?

So far from what I have seen in the demo account, all credit note are in the status “sent” and none of them has mark as paid/refunded.

Thanks,
Gijs

#6

You can apply a credit note to an invoice by creating a payment and selecting an invoice and credit note together. This will create the payment using the credit note.

You can refund a payment to return funds to your client.

#7

Hi Hillel,

I have tried this out and I now understand how the feature is planned.

With a credit note it is possible to enter a payment which is not a real payment but a way to clear/compensate the value of the credit note on the open balance of an invoice.

Amount Balance
Invoice I-001 $ 499 - 499
Cleared by credit note C-001 $ 100 - 399
Payment $ 399 0

But that means that I can only clear/mark as paid a credit note as long as the client has an open balance on at least 1 invoice.

Example: I have to a job for a new client and we estimate that we need 5 hours. Because it is a new client, he will receive an invoice with 5 hours á 100 $ and he needs to pay upfront.
So Invoice is 500 $, payments was made and the balance is 0 $.
We than do the job much quicker and only needed 3 hours. So we will “reimburse” the client and create a credit note of 2 hours á 100 $. Of course I can refund the client by sending him a bank transfer of 200 $ but I will never be able to mark the credit note as paid or even enter this (negative) payment in InvoiceNinja.

The only option is when the client has a second job for us and we sent an invoice for 3 hours but because of the credit note of 200 $, he only needs to pay 100 $.

The example may be a little strange but we had these in the past. So if there is an option so just enter a negative payment with our the need of a connection to an invoice, that would be really great.

What I really like, is the way the client can apply his credits in the client portal. :slight_smile:

Thanks,
Gijs

#8

Thanks for your input, @david what do you think?

#9

Hi Gijs,

We have reworked the philosophy of payments in V5 a little.

In V5 nothing effects the client balance until a payment\credit is applied to an invoice.

In the example above, depending on how you accept payments, your workflow could look like this:

  1. Accept payments via Invoice Ninja.

$500 Invoice Paid

$300 finally billed

Refund Payment $200.

Update Invoice to reflect the $300 paid balance.

  1. Accept payments by other means.

Create $500 Credit Note.

Create $300 Invoice. Send and mark as paid.

Update Credit note with negative line item of -$200 and process refund to client.

Does this match the flow you were expecting?

#10

Hi @david,

Both examples could work but I see one major issue: At least in Germany but I guess also in most other European countries, it is not allowed to change anything to the documents once they have been sent to the customer.

In both of your examples, I would have to update either the credit note or the original invoice after they have initially been sent to the customer.

One option I see here, is to simply create an invoice with a negative amount. I haven’t tested it with online payments but since the biggest part of our payments are done via bank transfer, this wouldn’t be an issue. The only issue with this workaround, is that it still is an invoice with an invoice number and not like in v4 where the “negativ invoice” would automatically become a credit note number.

What would break if you would allow negative payments and if credit payments wouldn’t necessarily need a connection to both a credit note and invoice?

Thanks,
Gijs

#11

Hi,

I also ran into this today. The current solution is basically unusable in Europe, even worse, all the credit notes and negative payments we made in V4 were not even migrated to V5… this is a major issue.

I can’t understand how this change has gotten into the release, this hasn’t be tinkend about…

This also affects the hosted version of Invoice Ninja.

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#12

Hi @hillel, hi @david

Have you had a chance to give this a thought?

Thanks,
Gijs

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#13

@ecomsilio

If you have a left over amount of say $200, can you create a credit note for $200, and then update the invoice (with negative amounts) when you apply future charges to the client?

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image787×601 39.2 KB

Would this suit your workflow?

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#14

Hi @david

you solution is about credits when they are used as a “deposit”, like used when you sell a retainer-package to a client and bill them later with the exact amount of service/time etc. and instead of receiving a payment, you offset ist with the credit which was paid earlier.

As far as I understand what @bramdriesen needs and what I need, is a credit note that can be linked to an outgoing payment/refund.

We can’t change invoices once they are sent to the customer. So that is not an option. The credit notes are needed for the following case.

A customer doesn’t have any credits or whatsoever but just pays our bills after we have doen the work. So after we finish some work, I sent the customer an invoice over 500 $. Then the client complains and for some reason I decide, that the client will receive a credit note over 100 $. So the total balance for this customer is 400 $.

a) The customer already paid the complete invoice value of 500 $ and needs to get a refund of 100 $. I need to create a credit note and refund the customer. The outgoing payment needs to get linked to the credit note.

b) The customer refused to pay untill we got to an agreement and now just paid 400 $ since that is the total balance on his account. His payment is linked to the invoice and the total balance is 0. Ideally the open amont on both invoice and credit note can clear each other.

Does that make sense?
At least this was possible in v4.

Many thanks for your ideas and help,
Gijs

1 Like
#15

Correct, what you described is exactly what we need.

And indeed once an invoice is sent to a customer we can not change it anymore (EU Law). If we need to adjust something we need to create a credit note to apply the change and/or create a new invoice.

I’m working in a rental business where typically clients only order once. They need to pay a safety deposit in case they damage our property. After the event we create a credit note and add a negative payment to reimburse the safety deposit to the client. And that would mark the end of the lifecycle.

So a concrete example:

Customer rents product X for 200 $, he will receive an invoice of 400 $ because we charge a safety deposit of 200 $ (also a product in Invoice Ninja).

Next day after the event is over and no damages occurred, we would create a credit note to refund the safety deposit of 200 $.

After the credit note is created we would add a negative payment so the money would be deducted from our total and so we could mark the credit note as paid/completed.

In the current stage we can only add a negative payment, but we can’t link it to the credit note, nor can we mark the credit note as closed or paid.

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#16

@ecomsilio @bramdriesen

Reading through this. It seems like what you really want is just a “receipt” for the refund to your client, am I correct? This would be define as a credit note?

#17

@david
Not 100%. It’s legally required it states “credit note”. Secondly it needs to be linked to a payment which currently throwing 2 validation errors.

#18

@bramdriesen

Ok,

so credit note
linked to payment
but has a zero balance, correct? ie cannot be used for future payments and it just represents the refund?

#19

@david That is correct! :slight_smile: It’s unrelated to the balance.

#20

Hi David,

like Bram already wrote, it is not just a receipt. It is like a negative invoice. Ideally there is an option to link a credit note to an invoice as in most cases the refund will be issued after an invoice was created.

In Bram’s example it is a security deposit. In my case it most often is something we billed incorrect or if we need to refund to client for work we billed and the customer is not happy with it. Luckely this happens only a few times a year but I still need some solution for it. In v4 it was easlily possible by entering a negative amount on an invoice. But that doesn’t work in v5 anymore.

Thanks for taking this in consideration.
Gijs