What if a deposit is not paid?

Deposit invoices are sent to a client to elicit payment ahead of an event. Deposit invoices can be a flat amount or a percentage of the event charges, but they do not bill for charges. Charges are billed on the final invoice, which is a standard invoice. On the final invoice, deposit invoices are selected and the amount of that invoice is credited towards the balance of the final invoice.

The problem comes when that deposit invoice is not paid or is not paid in full. When the deposit invoice is selected on the final invoice, the invoice amount is applied - not the amount of payments which were allocated to the deposit invoice. If the deposit invoices are not paid in full, you will need to collect on both the deposit invoice and the final invoice since they are separate outstanding invoices that each have their own balance. If you would prefer to present your client with one invoice for all monies due, we have some strategies for you below:

  • If no payment has been received
    • If the deposit invoice has not been paid at all, we recommend you void the invoice. The deposit will no longer appear in your aging reports and it cannot be selected on the final invoice. The final invoice will be for the full amount of the event.
  • If the deposit is not paid in full
    • You have several options, depending on your accounting best practices:
      • Edit the deposit invoice so that the balance of the invoice matches the payment amount. Select the deposit invoice on the final invoice.
      • Void the deposit invoice. This will un-allocate the partial payment. Allocate the payment to the final invoice.
      • Reverse the deposit. This will create a negative balance and a credit can be created to zero it out. The credit is then applied to your final invoice. This method should be used if you want documentation to send to your client.

If your accounting practices do not allow you to edit or void invoices, you will need to collect both the deposit invoice and the final invoice balances from your client. Be sure to select the deposit invoice when you create the final one.

As with all things financial, we recommend you discuss these strategies with your CFO or accounting department to ensure that you are following their best practices.