Provisional Invoice

Provisional Invoice is an estimated or preliminary invoice with non-legal binding. A Provisional Invoice is not a real invoice. Therefore, you would not record it in your accounts receivable system, and the buyer would not record it in their accounts payable system.

The Provisional Invoice simply tells the buyer what the terms of sale are and is used to make adjustments to the sale as agreed between both the parties ( you and the buyer ).

To open the Provisional invoice window, navigate to Menu > Financial Management > Provisional Invoice or search for Provisional invoice in search utility available in menu itself.

For the Transaction, Provisional invoice can be generated only after a Purchase Order and GRN (Goods Receipt Note) has been generated.

After clicking on Provisional Invoice from the menu, system will open the below window. Click on "New Record" button for the new record.

‘Tenant’ and ‘Organization’ fields will be auto populated based on user role & access and user can change the organization to create organization specific record.
User has to select the ‘Document Type’ from the dropdown.
User can enter ‘Document No’ manually or it will be auto generated after save the record.
System set system date in ‘Date Invoiced’ and ‘Account Date’ fields but user can change it accordingly.
User has to enter the Vendor for which the purchase has been initiated. According to Vendor, price list will be auto populated. User can change the Price list as well. Value will get set automatically in ‘Currency’ field according to the selected price list.
If currency is other than base currency, then user needs to define ‘Currency Rate’.
Order and Date ordered fields will be auto-populated once the user will fetch the information of either Purchase order or GRN from the Create lines From form.

NOTE: On Create Lines From screen - If there is no Material receipt generated against the order, then user can create the provisional invoice against the respective order else there is Material receipt generated , then user has to proceed with the Receipt only for the provisional invoice.

‘Representative’ is a person, who deals with customers on behalf of the company.
‘Sub Total’ and ‘Grand Total’ fields will get auto-filled based on the record selected from create lines from Process.

On Invoice Line tab , whole tab is read only. Data will be shown as per the selected record from Create Lines From process as shown below.

On Invoice Tax tab, all the taxes used in the transaction will be shown.

‘Complete’ button is used to complete the transaction or user can void the transaction by using same button.

Costing Calculations :

For the Provisional invoice, freight cost will be calculated on the basis of expected landed cost entered on purchase order.
NOTE : AP invoice will be generated with the ref of provisional invoice in order to calculate the cost correctly.
After the AP invoice, the product cost and freight cost will be calculated on the basis of amount difference between the expected landed cost ( from purchase order ) and the landed cost ( ap invoice charge line).

Generic demonstration of costing calculation is shown below for reference:

CASE : Purchase order with 5 qty, 100 unit price and 50 expected landed cost has been generated. After the shipment and provisional invoice is generated , following product cost is coming:

After the AP Invoice , which is having same price as per purchase order with landed cost – 100. Now the freight cost will be calculated as per the difference between the expected and landed cost (charge) i.e 50.

Product cost is same as the prices were same on both the invoices.

For freight, difference 50 has been divided to the previous values i.e 50 / 5 =10. Final output =10+10=20