Life cycle of an invoice
The life cycle of an invoice refers to the stages that an invoice goes through from its creation to final payment. It includes several steps, from the initial agreement between buyer and seller to the closure of the transaction once payment is made. This guide helps you understand the typical life cycle of an invoice in Zenskar.
Life cycle of an invoice
The following is a state diagram of an invoice in Zenskar.
What is a state diagram?
A state diagram, also known as a state machine diagram or state chart, is a visual representation used to model the various states an object or system can be in and how it transitions between those states.
In this document, the object we are dealing with is an invoice.
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stateDiagram-v2
classDef voidEvent fill:#f00,color:white,font-weight:bold,stroke-width:2px,stroke:yellow
classDef deleteEvent fill:#f00,color:white,stroke-width:2px,stroke:red
classDef paidEvent fill:green,color:white,stroke-width:2px,stroke:green
classDef partiallyPaidEvent fill:#90EE90,color:black,stroke-width:2px,stroke:#90EE90
classDef approvedEvent fill:yellow,color:black,stroke-width:2px,stroke:yellow
classDef draftBlock fill:black,color:white,stroke-width:2px,stroke:black
[*] --> Draft:::draftBlock
Draft --> Approved: Draft approved
Draft --> Deleted:::deleteEvent: Draft deleted
note right of Deleted : Only a **draft** invoice can be deleted. Once an invoice moves to the **approved** state, it becomes a **formal record of the transaction**. As a result, it cannot be deleted.
Approved --> Paid:::paidEvent: Customer makes full payment
Approved:::approvedEvent --> PartiallyPaid:::partiallyPaidEvent: Customer makes partial payment
PartiallyPaid --> Paid:::paidEvent: Customer makes full payment
Paid --> [*]:Accounting
Approved --> Void:::voidEvent: Credit notes issued
Paid --> Void:::voidEvent: Credit notes issued
PartiallyPaid --> Void:::voidEvent: Credit notes issued
Void --> [*]:Accounting
note left of Void : If circumstances require a full refund to the customer, credit notes equal to the refund amount must be issued. As a result, an **approved**, **partially paid**, or **paid** invoice will move to the **void** state. Partial refunds also require credit notes, but the state of the invoice will remain unchanged.
Draft
📚 A newly generated invoice is called a draft invoice: a preliminary version that is open to modifications.
Approved
📚 Once you have reviewed the draft invoice and confirmed that the details are accurate, the draft invoice can be approved. * Once you have verified all the details of a draft invoice, it can be approved by clicking on the Approve invoice button.
Note
Once a draft invoice is approved, it becomes a formal record of a transaction between you and your customer. Relevant accounting entries are created. Therefore, unlike a draft invoice, an approved invoice cannot be edited. Once approved, any adjustments to the invoice can be made only by issuing credit notes. Therefore, it is important to scrutinize the draft invoice before approving it.
Partially paid
📚 When customers make a partial payment on an approved invoice, it becomes a partially paid invoice.
Paid
📚 When customers make a full payment on an approved invoice, it becomes a paid invoice.
An approved invoice can become a paid invoice in the following ways:
- Customer can make multiple partial payments amounting to the invoice due amount.
- Customer can make one payment amounting to the invoice due amount.
Void
📚 If circumstances require a full refund to the customer, credit notes equal to the refund amount must be issued. As a result, an approved, partially paid, or paid invoice will become void.
- If an invoice has only been approved and no payments were made by the customer, relevant accounting adjustments are made.
- If an invoice is already paid, then a refund is issued to the customer's source payment method.
Updated about 2 months ago