Draft Credit Invoices

What is it and what is it for?

Draft credit invoices exist to split, in companies with a dedicated billing team, the work of preparing an invoice from the work of issuing it. A draft invoice can be generated in one of two ways, depending on how your company sells:

• From Stock Allocations to bill. Flow: Sales Order → Stock Allocation → Draft Invoice → Final Invoice. Used when your company reserves inventory for a sales order (a Stock Allocation) before billing it; the draft invoice is generated from the allocations still pending to be billed.
• From Sales Orders to bill. Flow: Sales Order → Draft Invoice → Final Invoice. Used when your company bills directly from the order, without going through a stock allocation. A sales order can only follow one of the two paths: once it is linked to a stock allocation it no longer appears in the list of orders available to create a draft invoice this way, and vice versa.

Either way, once the draft invoice looks right, you use the Convert to Credit Invoice action to generate the real, final Credit Invoice, which is the one that actually moves inventory, posts the accounting entry and creates the customer's receivable balance and, where required, the fiscal document.

Screens in this area

How to use it step by step

1. Open the list and click New. Choose Stock Allocations to bill or Sales Orders to bill, matching how your company reserves and bills inventory. You need the "add" level of the Draft Invoices permission.
2. Filter by location, customer and currency (all three required) to find the pending allocations or orders; you can further narrow the list by a specific sales order or a document date range.
3. Select the rows to bill and save. The system copies the items, prices, taxes, lots, bins, attributes and serials from the source allocation or order into the new draft invoice, and proposes the customer's payment term and sales rep automatically.
4. Review and complete the draft from Edit: adjust notes, billing/shipping addresses or attach supporting files. You can also add more allocations or orders to the same draft with the button on the items tab.
5. Convert it to a final invoice. Open the draft's Details and click Convert to Credit Invoice. The system generates the real Credit Invoice with today's date, checking the customer's credit limit and overdue invoices before confirming it.

Key fields

Validations when saving

• Location, customer and currency required to generate a draft invoice from either allocations or orders.
• The customer must have a payment term configured on its card; otherwise the draft cannot be created.
• A sales order can only be used once. If you try to create a draft directly from an order that is already linked to a stock allocation, an invoice, a cash sale or another draft invoice, the save is blocked and the conflicting order number is shown.
• Non-negative price on every line, and a valid price level if one is used.
• The accounting period for the document's subsidiary and date must be open.
• Source order still valid: when a line keeps a reference to its originating sales order, that order must exist, not be voided, belong to the same subsidiary and, if it is a sales order, be authorized and billed to the same customer.
• Valid item, unit of measure, tax schedule and tax retention on every line, same as on a regular sales document.

Managing the document

Depending on your permissions and on whether the draft has already been converted, you can:

• Edit it and add more allocations or orders, as long as it has not been converted into a final invoice and is not voided.
• Delete or void it, also only while it has not been converted; once a final invoice exists from it, those actions are no longer offered.
• Convert it to a Credit Invoice from its Details screen, generating the definitive, fiscally-numbered document.
• Print it, in the default layout or a custom HTML template configured for draft invoices.
• Run the detailed reports from the list, for draft invoices pending conversion or for the credit invoices already generated from them.

What happens when you convert it

• The system copies the draft's customer, currency, items and addresses into a brand-new Credit Invoice, dated today, and links both documents together.
• It checks the customer's available credit limit and overdue invoices before confirming the sale, unless your user group has the specific override permissions for those two checks.
• If your company has automatic prepayment application or unapplied cash-receipt payments enabled, those are applied to the new invoice automatically.
• If your company's configuration requires the draft and the final invoice to share the same document number, the credit invoice keeps the draft's number instead of pulling a new one.
• Converting requires, in addition to the Draft Invoices permission, the void-level permission of Credit Invoices — an extra safeguard since this step issues a real, final fiscal document.

Availability and permissions

• This entire area requires your company's plan to include the Advanced Inventory module (an Enterprise-edition add-on) with the Stock Allocations feature enabled. Without both, the screens show a "not available for your edition" notice and the menu option is hidden.
• Access is controlled with the "Draft Invoices" permission of the user group, with separate levels to browse, add, edit, delete and void.
• Converting a draft into a final invoice additionally requires the void-level permission of Credit Invoices.
• With subsidiaries enabled, the subsidiary column and filter appear on the list, and drafts are filtered by the subsidiary tied to their location.

Tips and common mistakes