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What is a Reserve Invoice?
Picture this scenario. You’ve just drafted the perfect sales quote – ready to convert to invoice and send to your customer. Which invoice should you use? A sales invoice or sales reserve invoice? And what’s the difference? Webster’s Dictionary defines a reserve invoice as a document provided prior to or with a shipment of goods (as for export) that describes the items and terms of sale but does not have the function of a real invoice. Easy, right? But hold your horses there. This isn’t my slightly jolly uncle’s wedding speech – we have a few more intricacies to cover before we can toast the happy couple.
Let’s start with the basics around a traditional sales invoice. As standard, a sales invoice records a business transaction and is an official mark of a service provided or goods delivered. In Enterpryze, it is normally preceded by a sales delivery document. In which, it will reduce your inventory levels by any physical items included. Even in the absence of a sales delivery document, the sales invoice itself will do the stock reduction. All before taking payment and herein lies the potential problem.
Benefits of using Reserve Invoices
The traditional method means we must let go of our stock before we collect payment from a customer. However, there could be a number of scenarios that would lead us towards wanting to do the reserve. Perhaps there this is a cash flow requirement, perhaps your business requires greater tracking on inventory levels or perhaps you may even have fickle customers who can’t be relied upon to pay on time after receiving delivery. Whatever the case, if any of this rings true the sales reserve invoice is the document for you.
While a regular sales invoice will also create a journal entry, this is not the case for a reserve invoice. Therefore, it is more suitable if you don’t want to deduct the items from your inventory yet. It ensures a customer’s commitment to pay for ordered goods which can only be a good thing.
Sales Reserve Invoices in Enterpryze
Not too great of a change is required to start using sales reserve invoices in Enterpryze. From either a sales quote or a sales order, rather than copying to a sales delivery you should first press the arrowed dropdown and select ‘sales reserve invoice’. And you’re done, easy as 3.1415 etc. From here you are free to take payment from the Billing module, all before the goods have left your warehouse.
Come back to the reserve invoice now and you’ll see that it is still open unlike a regular invoice would be after taking payment. Is this black magic? Close, but really it’s the beauty of the sales reserve invoice. The reserve invoice can now be copied to a sales delivery to mark the closure of the sales flow and inventory movement. So let’s all raise a glass – to the happy couple and our new favourite sales reserve invoice.