How to Configure Invoicing Policies in Odoo 18
Overview
Odoo assists them in their invoicing policies, which determine when and how customers are to be billed for products or services. This means that companies can decide on either invoicing more upon ordered quantities for only after delivery. This feature helps in managing cash flow, ensuring proper timing for the actual invoicing process.
Some of these options include:
Invoice on Ordered Quantities: Invoice the customer upon confirmation of the sale order.
Invoice on Delivered Quantities: Invoice once goods or services are delivered.
These options exist with varying business needs to align billing with a company's sales cycle alongside customers' agreements.
Configuration
Go to Sales > Configuration > Settings and, under the Invoicing heading, select an Invoicing Policy rule: Invoice what is ordered or Invoice what is delivered as shown below.
Note that, if you are supposed to choose the invoicing policy as ‘invoice what is delivered,’ you will not have the option to activate the automatic invoicing feature in Odoo 18
Configuring Invoicing policy in product form
The ‘Delivered or Ordered Quantities’ options are used to customize the invoicing of products. To set the customized invoicing for each product, go to Sales > Products, and open the form of the product you want to set up customized invoicing. Set an invoicing policy to define when to invoice or generate an invoice for each product in addition to the global policy set in Settings.
Invoice Based on Ordered Quantity
This option allows creating an invoice immediately after the confirmation of the sale, based on the quantity ordered.
This method helps in improving cash flow and hence allows for the collection of payments more quickly. It finds its application, especially in those cases where custom orders require upfront payment.
However, sometimes early billing may not satisfy a customer who is experiencing delayed delivery. This happens prior to delivery being affected, in instances where the order is canceled and an invoice has already been raised; a credit note is probably issued.
Delivered Quantity Based Invoice
In this option, one can only be sure of confirming delivery, which thereafter permits more accurate billing to occur based on whatever has been delivered.
Billing on delivery normally enhances customer satisfaction because they will be charged only for what has been received, and it also reduces the chances of issuing credit notes due to billing errors.
Disadvantages are that the invoices upon delivery may slow cash flow. In the same light, partial deliveries have to be processed using possibly multiple invoices, which increases administrative effort.
If a user tries to create an invoice for a product having invoicing policy as delivered quantity and delivery not validated, the following error message will appear:
Down payments
Even using 'Invoice on Delivered Quantities' policy in Odoo is the ability to issue an invoice before delivery is made through an advance payment option. You can create an advance invoice even if the delivery is not finalized.
Below, the screenshot shows how Odoo suggests a down payment option while invoicing a product set to 'Delivered Quantities".
You can put an advance as a percentage of the total or a fixed amount. Here, 'Down payment (percentage)' is chosen at 20% as the first payment. Now a draft invoice is created for this advance, as seen below.
After the delivery is validated, an additional invoice can be issued for the remaining balance, as shown below.
