Partial invoice

What is a partial invoice? A partial invoice is similar to a regular invoice, but with the special feature that it rep­re­sents only a part of a total invoice. The set­tle­ment of larger orders that run over a long period of time (e.g. con­struc­tion projects) is often divided into several partial invoices, which are paid depending on the progress of the order execution. The advantage for the con­trac­tor is that they do not have to pre-finance the entire contract. This also reduces the risk of a complete default.

The advantage for the client is that the con­trac­tor is en­cour­aged to carry out the in­di­vid­ual order services punc­tu­al­ly and error-free. The amount and frequency of partial invoices is de­ter­mined by the type and timing of the agreed delivery or service.

In the con­struc­tion industry, partial invoices are widely used. Con­struc­tion projects usually extend over a certain period of time, and, taking into account the expected progress of con­struc­tion, ac­cep­tance and cor­re­spon­dence payments are agreed in advance invoices. A down payment invoice, which the customer pays before beginning con­struc­tion, is also common.

In other trades and in plant con­struc­tion, partial invoices are used above all when longer-term projects are involved. Here, too, down payments before the start of the project are not uncommon, which is usually followed by an interim invoice as soon as the first agreed service has been rendered and accepted.

However, partial invoices are also not uncommon for other types of orders in many in­dus­tries: self-employed people who carry out long-term orders often agree on partial invoices with their customers in order to secure a regular income. In return, clients agree to advance invoices with companies in order to better plan their payments over time. This means that both sides often benefit from an even cash flow in partial amounts.

A partial invoice does not differ in its basic form from any other invoice. But there are a number of required com­po­nents, which must not be missing on any partial invoice.

First, a partial invoice must be clearly iden­ti­fied as such, including its serial number (1st or 2nd partial invoice, etc.).

The other mandatory details generally apply to every invoice:

• Name and address of both the seller and recipient, including date of sale
• Mer­chan­dise point of entry des­ti­na­tion (if goods have been imported)
• Mer­chan­dise country of origin (if ap­plic­a­ble)
• Date of issue
• Con­sec­u­tive invoice number
• Time of delivery/per­for­mance of the service
• Product/service details (de­scrip­tion, quan­ti­ties, ad­di­tion­al charges)
• Tax rate
• Net amount
• Sales tax amount (if ap­plic­a­ble)
• Gross amount

In addition, it won’t do any harm to add a statement of settled and out­stand­ing in­stall­ment payments. If you create a final partial invoice, the set­tle­ment of which concludes the payment of the total amount, you must attach the total invoice and note all partial invoices made so far in it. The last partial invoice therefore contains a final invoice if the full service has been rendered.

There is no leg­is­la­tion in place de­ter­min­ing the amount that can be requested in a partial invoice. Con­trac­tu­al partners should agree before the start of a project when invoices are due, and how payments will be broken down. However, variables may occur and must be run by the customer. Typically, project phases or sub-projects are defined, each of which is concluded with a cor­re­spond­ing partial invoice and the amount of which depends on the re­spec­tive service or is agreed in advance. The following factors can influence the amount of a partial invoice:

• Agreed advance: The customer and the rep­re­sen­ta­tive often negotiate an advance invoice, which is then taken into account in future partial invoices. An advance payment logically reduces the amount of the first (and possibly sub­se­quent) in­stall­ment payments, or the first time of the first in­stall­ment invoice after the start of the project is placed in the distant future due to the advanced payment.
• Material costs, personnel costs, ad­min­is­tra­tive costs: As far as these are costs are concerned, it is important to be ab­solute­ly trans­par­ent with the customer – es­pe­cial­ly if invoice amounts have not been fixed in advance. Certainly, ne­go­ti­at­ing skills also play a role here.
• The amount of the partial invoices will, of course, determine the occasions for which partial invoices are sent within the project (com­ple­tion of sub­pro­jects, etc.). The project planning should also include the costs for the in­di­vid­ual phases so that the customer can re­al­is­ti­cal­ly estimate the amount of the partial invoices in advance. It is also con­ceiv­able to design the project in such a way that the frequency and amount of the partial invoices meet the customer’s ex­pec­ta­tions.

• Do not forget the mandatory in­for­ma­tion.
• Each partial invoice normally contains the in­di­vid­u­al­ly cal­cu­lat­ed tax on sales/purchases, which you must also pay sep­a­rate­ly to the tax office (if ap­plic­a­ble to your State). Do not take this into account with the final invoice!
• Document all partial invoices in detail in the final invoice.

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