Invoice lifecycle

Overview

In accounts receivable, an invoice is a type of receivables issued by a company to its customers for delivered goods or used services that have not been paid for yet. This usually occurs because of credit sales and as a result of buying goods or services on credit.

Monite API enables the whole accounts receivable aspect of SME's business to run in an "auto pilot" mode. By integrating Monite API to your software or any other application:

• Creating/sending invoices becomes much more convenient.
• Follow-up (e.g. payment reminders and dunning notes) is fully automated.
• Transparency (where do we stand/what do I need to do) is always given.

Invoice lifecycle

Outgoing invoices move through different statuses from the time they are created to when they are paid.

Monite API provides a flexible invoice workflow to be managed by each entity and their respective entity users. The entities can easily control access to invoices based on the role assigned to each employee through the user hierarchy.

Draft

All new invoices are created as drafts. A draft invoice is not issued yet and can be edited anytime.

A draft invoice can remain stored in the platform as a draft or move to deleted or issued.

Issued

Indicates that the invoice has been finalized and issued to a counterpart. Issued invoices cannot be edited or deleted, just canceled.

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Issued invoices do not state how the invoice has reached the counterpart. It is necessary to define the channels:

• Postal: downloaded and manually distributed + updated manually in the platform.
• Email: send via platform, either Monite email service or partner-integrated email service.
• B2B & B2G platforms.

Recurring

When configuring recurring invoices, the recurring status is assigned to the base invoice from which the recurring invoices will be generated. The recurring invoices themselves go through the normal receivable lifecycle (e.g. draft → issued → paid).

Even if the recurrence ends or is canceled, the base invoice remains with the recurring status.

Paid

Indicates that the customer has fully paid the invoice and the amount has been received by the SME on their bank accounts. This is the final state of an invoice and can only be viewed.

Partially paid

Indicates that the customer has made a partial payment of the invoice. Partially paid invoices cannot be canceled or deleted, but it is possible to:

• View the invoice and add internal notes.
• Start the invoice reminder process in case the remainder needs to be paid.

If the customer pays the remaining amount by the due date, the invoice can be marked as fully paid; otherwise the invoice can become overdue.

Overdue

Indicates that the counterpart has not paid the invoice in full by the due date. Depending on the commercial conditions, the counterpart will or will not be able to make further payments against the invoice.

An overdue invoice cannot be canceled nor deleted, but it is possible to:

• View the invoice and add internal notes.
• Start the dunning process in case the remainder needs to be paid.

Canceled

Indicates that the invoice has been canceled. The counterpart cannot view or make payments against a canceled invoice, although the entity can still view it. Only unpaid issued and overdue invoices can be canceled.

Deleted

Only draft invoices can be deleted. Deleted invoices can no longer be accessed.

Uncollectible

Indicates that a counterpart is unlikely to pay this invoice.

The difference between uncollectible and canceled is that uncollectible still has a legal claim on the counterpart. Uncollectible is also a final state after handing over an invoice to a debt collection agency that was not able to retrieve the funds. For bookkeeping, this is a right off and has a tax implication.