Progress payments, partial invoices and final invoices

For projects with longer durations or high total amounts, it is common to collect partial payments via several progress invoices and to issue a final invoice at the end. This is standard practice especially in construction, plant engineering and planning services. faktoora fully supports this workflow.

Difference between progress invoice, partial invoice and final invoice

Progress invoice

A progress invoice is an advance payment invoice for part of an overall service. It is issued before the final settlement and serves as interim financing. Typical examples:

• A construction project: first progress invoice after 25 % of the work
• A large project: monthly progress invoices for services rendered
• A planning project: progress invoice after completion of the design

In electronic invoice exchange, a progress invoice is identified by invoice type 384 (EN 16931).

Partial invoice

The term partial invoice is often used synonymously with progress invoice. It is an invoice for part of a larger service. Partial invoices also receive invoice type 384 in electronic formats.

Final invoice

The final invoice is the concluding invoice. It offsets all previous progress payments against the total claim. It is identified by invoice type 385.

Example:

• Progress invoice 1: 1,000 EUR
• Progress invoice 2: 1,200 EUR
• Final invoice: 500 EUR (difference between the total amount of 2,700 EUR and the previous payments)

Specifying several service periods

If you issue several progress invoices, each has its own service period. In faktoora, this is defined via the billingPeriod fields with startDate and endDate (format: YYYYMMDD).

Example: a quarterly project

• Invoice 1 (progress): service period 2024-01-01 to 2024-03-31
• Invoice 2 (progress): service period 2024-04-01 to 2024-06-30
• Invoice 3 (progress): service period 2024-07-01 to 2024-09-30
• Invoice 4 (final): service period 2024-10-01 to 2024-12-31

In the user interface, you enter these under "Service period" when you create the invoice.

Billing percentage-based services

Under EN 16931, percentage-based services cannot be entered directly as a percentage (e.g. "80 % of a line item"). Instead, the percentage is expressed via the quantity.

Example: line item "Planning" with the unit "piece"

• Total service: 1 piece at 1,000 EUR
• Progress payment for 80 %: quantity 0.8 at 1,000 EUR = 800 EUR

The system automatically calculates the correct amount, and the invoice remains standard-compliant.

Security retention on progress invoices

A security retention (e.g. 5 %) is often agreed contractually and must be shown in a structured way on the progress invoice, not simply deducted from the total value or only mentioned as free text.

The correct representation: the security retention as a separate invoice line item with a negative quantity and a positive unit price.

Example:

This modeling is:

• Machine-readable and can be validated
• Compliant with EN 16931
• Accepted by public-sector clients (e.g. Deutsche Bahn)

The security retention is not listed again in the final invoice. The withheld amount then becomes due in full.

Creating a final invoice with offsetting

The final invoice takes all previous progress payments into account automatically. Here's how to proceed:

1. Open a new invoice. It is a separate invoice with its own invoice number, not a "correction" of the progress payment.

2. Enter all line items of the final invoice. These are the services not yet billed.

3. Set the service period for the remaining period (e.g. 2024-10-01 to 2024-12-31).

4. Optionally refer to the progress payments. In the "References" field, you can enter the numbers of the previous progress invoices so that the recipient can see the connection.

5. The amount due on the final invoice is calculated from:

   • the total service
   • minus all previous progress invoices
   • plus/minus surcharges and discounts, security retentions, VAT differences

Example:

• Total service: 3,000 EUR (net)
• Progress payment 1: 1,000 EUR (paid)
• Progress payment 2: 1,200 EUR (paid)
• Final invoice: 3,000 - 1,000 - 1,200 = 800 EUR

Due date on final invoices

Each invoice (progress and final) has its own due date, which you set in the "Due date" field or via payment terms (e.g. "Net 14").

A final invoice can, for example, have a different due date than the progress invoices if this has been agreed contractually.

References between invoices

If you want to see later which progress invoices belong to a final invoice, it helps to document this reference. Many accounting systems can then make the assignment automatically.

In faktoora, you can:

• Refer to the progress invoice numbers in the free text field or in notes
• Set the reference explicitly via the API using the invoiceReferencedDocument field

Important: each invoice gets its own number

A critical rule: Progress invoices and final invoices each receive their own invoice numbers, which are never repeated. A number that has already been assigned is not used again.

The system supports you with this:

• For Peppol invoices, the invoice number is an idempotency key: if you try to create a second invoice with the same number, the system rejects it
• For other formats, a continuous numbering system is recommended (e.g. RE-2024-0001, RE-2024-0002, …)

Cancelling a progress invoice

If a progress invoice contains errors, cancel it with a cancellation invoice with invoice type 381. The cancellation is audit-proof and documents the error correction without gaps.

Then create a new progress invoice with the correct content and its own invoice number.