These are uncertain economic times. Bring in money faster by using progress invoicing.

If you’re concerned about your company’s cash flow because you don’t know what will happen with the U.S. economy in the coming months, you’re not alone. The vast majority of small businesses struggle with cash flow all the time. Are you making more than you’re spending? Will that change six weeks or three months from now?

We don’t have a crystal ball that will help you answer that question. But we do have QuickBooks Online. Besides providing predictive charts that can assist you in looking at future cash flow trends, the site offers a tool that can help you take concrete steps to actually improve your cash flow in the near future.

If you send out estimates and/or do multi-part projects for your customers, you can create progress invoices. These modified invoices allow you to send partial bills. You can break up your product and service costs into smaller pieces and start getting paid sooner than you would if you waited until your work was complete. Here’s how it works.

Readying QuickBooks Online

Before you get started, check to make sure QuickBooks Online will accommodate these modified invoices.

1. Click the gear icon in the upper right and select Account and settings under YOUR COMPANY.
2. Scroll down and click Sales, then scroll down in the right pane until you see Progress Invoicing.
3. Make sure this option is turned On.
4. Click Done in the lower right corner.

Creating A New Template

Now you have to modify the invoice template to accommodate progress invoicing.

1. Click the gear icon in the upper right again and select Custom form styles under YOUR COMPANY.
2. Open the New style menu in the upper right and select Invoice.
3. Your default template will appear in the box under Design/Content/Emails. Replace that name with a new descriptive name so you don’t overwrite your default invoice settings.
4. Click Change up the template.

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You’ll have to change the name of the default invoice template so you can modify it to use as a progress invoice.

• Select Airy new in the options that open.
• Modify the design as needed (for example, add a logo).
• Click When in doubt, print it out to see your print options.
• Go to the Content tab, select sections to edit, and adjust fields as necessary.
• Switch to the Emails tab and make changes there.
• Click Preview PDF to review your design, then Done.

You’ll be returned to the Custom form styles page, where your new template will be listed. Pay attention to which template says (default) in the FORM TYPE column. This will open automatically when creating new forms (though you can change it on the fly). To change the default, open the Edit menu in the last column.

Creating A Progress Invoice

When you have an estimate you want to start billing (even though you haven’t completed all the work or purchased all the products), locate the estimate in the Estimates list.

• Click Convert to invoice at the end of the row.
• A window opens asking how much you want to invoice. Your options are:
  • Remaining total of all lines
  • Percentage or amount
  • Manual entry for each line

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You have three options when you're creating an invoice.

You would choose the first option if you’ve already partially processed the invoice and are ready to close it out. The second option allows you to enter a flat percentage of the invoice total to include. The third option opens the invoice with zeroes in the Due column, and you can alter amounts line by line.

The Balance due will reflect your changes. For the final invoice in a project, check Remaining total of all lines.

When finished, process the invoice as you would a standard one. You can always track your progress invoices by running the Estimates & Progress Invoicing Summary by Customer Report.

Other Routes to Better Cash Flow

Of course, there are additional ways to improve cash flow, many of which QuickBooks Online supports. For example:

• Offer modest discounts for early payment.
• Apply finance charges to late payments.
• Send invoices immediately and consider shortening terms (e.g., 15 days instead of 30).
• Identify slow-moving inventory and sell it off at a discount.
• Send reminders for late payments and follow up promptly.

Progress invoicing benefits both you and your customers. And in these challenging economic times, everyone needs a break. Let us know if you have questions about managing estimates and invoices in QuickBooks Online. We’re here if you need us.

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