What is an interim invoice?

By Andrew K.

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What is an interim invoice?

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What is an Interim Invoice?

An interim invoice is an invoice issued to a customer before the completion of a project, or before the delivery of goods or services.

This type of invoice serves as a placeholder, allowing the customer to make an initial payment before the total amount is due.

The interim invoice is typically issued when a more significant project requires multiple payments, or when goods or services are delivered over some time. This type of invoice is sometimes referred to as a down payment invoice, as it allows the customer to make a down payment on a purchase.

The customer is then expected to make additional payments as the project progresses, or as goods or services are delivered.

It is important to note that an interim invoice should not be considered a final invoice, as the final amount may be subject to change depending on the course of the project or the number of goods or services eventually delivered.

An interim invoice for purchase usually includes the following details:

  1. The date of purchase
  2. The date of issuing the interim invoice
  3. The name and address of the recipient, who may be different from that on the final bill
  4. A description of what was purchased, including quantity, unit price, and total price
  5. Payment terms; such as cash on delivery or 30 days net
  6. Terms for return or exchange

Interim Invoicing Pros & Cons - Usage Considerations

This practice offers many advantages and disadvantages, so it’s important to weigh the pros and cons of interim invoicing before deciding whether to use it.

Pros

  • Improves Cash Flow: On the plus side, interim invoicing provides businesses with immediate access to funds, allowing them to have greater control over cash flow. It can also reduce the risk of non-payment since businesses can collect money as soon as a project is completed.
  • Can act as a way to track the project progress for you and the client: Additionally, interim invoicing allows businesses to track the progress of a project more closely, which can be useful for monitoring its performance.

On the other hand, there are certain drawbacks to using interim invoicing.

Cons:

  • Tracking Payments Can be difficult: For one, it can be difficult to track payments if multiple invoices are sent out.
  • It's hard sometimes to estimate the cost of the project: Additionally, it may be difficult to accurately estimate the cost of a project when it’s divided into phases and billed separately.
  • Can be Time Consuming: Furthermore, interim invoicing can be time-consuming, as businesses must send out multiple invoices and track payments for each one.

Ultimately, businesses must decide for themselves when it’s appropriate to use interim invoicing and when it’s better to stick to a single invoice at the end of a project. In any case, it’s important to weigh the pros and cons of interim invoicing before making a decision.

How Do I Create An Interim Invoice?

  1. Provide an estimated cost: Businesses must first accurately estimate the hours and associated costs that will be needed to complete a job before creating interim invoices. This step is essential for budgeting and tracking the progress of the job. It also includes any equipment or supplies necessary for the project, such as tools, materials, and any necessary labour. Taking the time to carefully assess the associated costs upfront can help businesses ensure that they are properly budgeting for the job at hand and remain on track for successful completion.
  2. Agree Upon A Schedule: Before issuing an interim invoice, it is essential to agree upon a schedule. Once an estimate has been established, you will need to set a timeline for when the interim invoices are to be submitted, and your client must sign off on this schedule. To ensure that you are charging the correct amount for each invoice, you can use your project timeline as a starting point to help you determine the amount. It is important to ensure that the timeline is clearly outlined and agreed upon by both parties before issuing any interim invoices.
  3. Sending the interim invoice: Send in your interim invoices as planned. It's important to include the due dates on each invoice to make sure you get paid on time. Doing this will show your client that you care about details and that you want them to pay you quickly. It will also help strengthen your relationship.

Submit a Final Invoice

Send the client a final invoice when you finish the project. This invoice will have more information than the earlier ones and will show the exact cost of the project if it is different from what was originally estimated. The invoice should include:

  • An invoice number
  • A list of all the work done
  • How many hours you worked (if you get paid by the hour)
  • The full cost of the project
  • Ways to pay
  • When payment is due.

We hope this guide has helped you understand the basics of interim invoices and how to create them. If you have any additional questions, please don't hesitate to reach out to us. We're happy to assist whenever needed.

Interim Invoice FAQs

What information is required for an interim invoice?: The information required for an interim invoice depends on the specific agreement between the customer and the business. Generally, it will include:

  • An invoice number
  • The customer's name
  • The date of the invoice
  • The goods or services provided
  • The cost of each item or service
  • The total cost of the invoice
  • And the payment terms.

What are the payment terms for an interim invoice?: The payment terms for an interim invoice will depend on the agreement between the customer and the business. In some cases, the customer will be expected to pay the full amount of the invoice within a specified period, such as 30 days.

In other cases, the customer may be required to make a partial payment at the time of the invoice and then make additional payments as the project progresses.

How do I create an interim invoice? Creating an interim invoice is relatively straightforward. First, you'll need to gather the necessary information, such as the customer's name, the goods or services provided, the cost of each item or service, and the payment terms. Once you have this information, you can create n invoice using Treble Wave

What is Next?

We can help you start creating invoices in under a minute by signing up for an account on Treble Wave Account Creation.

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