A down payment – also called a partial payment or interim invoice – is made by a client when purchasing a service, goods, or product. In the CATAMA software suite, you can create and invoice down payments for orders with a single click in the invoicing section . Generated down payment invoices are automatically credited to the total order value and included in the final invoice.
Why clients and contractors benefit from advance payments
A partial payment or down payment is a payment of a portion of an agreed invoice amount. Partial payments can be beneficial in many projects. They can reduce and minimize financial risks for both parties.
When undertaking financially demanding or lengthy projects, the question of how to split the costs often arises. A fair approach is to make partial payments. Instead of a single large final invoice, the contractor can request payment for completed work. This practice is common in both the automotive and skilled trades sectors.
By utilizing these advance payments, the contractor can pre-finance their work and any upcoming costs for materials and parts. Furthermore, the advance payment reduces the client's financial burden. Finally, advance payments also serve as motivation for the service provider.
To implement a partial payment, you can define milestones CATAMA project management , you can quickly create projects of this type. Once a project phase is completed, the client is invoiced for the services rendered and materials used to date.
But be careful: In the skilled trades, among other sectors, the law governing contracts for work and services . This law stipulates that the contractor must first perform the agreed-upon service. Only then can payment be demanded. However, if the right to advance payments has not been explicitly excluded, the contractor can demand advance payments according to Section 632a Paragraph 1 of the German Civil Code (BGB).
The following conditions must be met for interim invoices:
- The service provided was essentially free of defects
- The service provided is of value to the client
- A list of the services rendered will be submitted to assess their performance.
- The submitted statement clearly shows for which partial service the payment is being requested.
