An advance payment - also known as a partial payment or advance invoice - is made by a client when purchasing a service, goods or product. In the CATAMA Software Suite, you can generate and settle advance payments for orders with one click the billing area Generated advance invoices are automatically offset against the total order value and listed in the final invoice.
Why clients & contractors benefit from the down payment
An advance payment or down payment is the payment of a partial amount of an agreed invoice amount. Advance payments can be useful in many projects. Financial risks can be reduced and minimized for both sides.
If financially complex or lengthy orders are implemented, the question of financial splitting often arises. A fair approach is the payment on account. The contractor can request payment for partial services instead of in the form of a large final invoice. A practice that is common in both the automotive sector and the trades.
The contractor can pre-finance his service and any upcoming costs for material and parts by using advance payments. In addition, the down payment reduces the financial burden on the customer. Last but not least, the down payment from the service provider also provides motivation.
Project sections with subtasks ( milestones ) can be defined for the implementation of an advance payment. In the CATAMA project management , you can quickly create projects of this type. If a sub-step of a project is completed, the client will be charged for the services and material quantities provided so far.
But watch out: In the trades, among other things, the law on contracts . This states that the contractor must first provide an agreed service. Only then can the remuneration be claimed. However, if the right to payment on account has not been expressly excluded, the contractor can demand payment on account in accordance with Section 632a Paragraph 1 of the German Civil Code.
The following requirements must be met for partial invoices:
- An essentially defect-free service is/was provided
- The service rendered is of value to the client
- A list of the same is presented to assess the work performed.
- The list submitted clearly shows for which part of the service the payment is required.
