Clarity Accounting: Invoicing and Creating PDF Invoices
The purpose of this help file is to show Clarity Accounting users how to enter invoices as well as creating and downloading PDF Invoices.
Invoices can be entered right on the Dashboard or under the “Income” section on the vertical navigation bar.
Clarity Accounting Invoice View
This section is used for small businesses whose primary method of getting paid is through “Invoicing”. Invoices are generally issued by businesses providing products or services to their clients. An invoice usually consists of the following elements:
- Invoice Number
- Invoice Date
- Vendor Contact Information
- Client Contact Information
- Payment Terms / Due Date
- Income Account
- Quantity (number of items sold / number of hours worked)
- Price / Rate (cost per item / hourly rate)
- Subtotal
- Applicable Taxes
- Balance Due
- Pre-payments (if applicable)
Terms & Payment Accounts
There are 2 ways income records can be recorded. They can be recorded as “Paid” or “Unpaid”.
Paid income records generally refer to products and services that are paid immediately with cash, credit card, or direct deposit.
Unpaid income records are generally used for invoicing. In an accrual / double ledger accounting system, when you invoice a client for your products or services, you are considered to have “earned” that income regardless of whether or not you are paid. Invoices usually have a “payment term” associated with it, allowing customers to pay days after the initial invoice was sent. Outstanding invoices are referred to as “Aged Receivables” in accounting terms. Unpaid income records will also require businesses to track down payments and entering payments into the accounting software when payments are received. If for some unfortunate reason, an invoice was not paid, then it can be an expense written off as “bad debt” .
To enter a “Paid” invoice, select one of the rows with “Paid” in the second column, and the bank, cash, or credit card account into which the payment is deposited. For example, if you received a cheque and deposited it into the bank, you would select your Checking Account.
To enter an “Unpaid” invoice, select one of the rows with “Unpaid” in the second column, and the number of days the receiver has after the invoice date to pay. For example, if you receive a bill that has “net 30″ terms (due 30 days after receipt), you would select “30 days”.
Income Accounts
Income accounts are used to differentiate revenue from different sources of income that will show up in your profit and loss statement. This is also a great indicator of which products or services are most profitable to your business. When you first create a business with Clarity Accounting, you will be asked to fill in your income sources. However, if you did not list all the income sources at the time you set up your business profile, you can always click on the “New Income Account” link to add more income accounts.
For each line item on the invoice/income record, select the income account that best matches that item, or add a new one if it doesn’t fit an existing category.
Sample Case Study:
Clarity Accounting recently demonstrated their online accounting software at a very successful Launch Party event put together by Bootup Labs. They received overwhelming requests from bloggers and freelancers to integrate Clarity Accounting with Freshbooks. This is because Freshbooks is an awesome online invoicing software and Clarity Accounting is an awesome online accounting software. Freelancers thought such an integration would allow those who use Freshbooks to generate Balance Sheet and Profit and Loss reports within Clarity Accounting.
Creators of Clarity Accounting took user suggestions seriously and contracted Habitsoft, Inc. to implement the Clarity Accounting - Freshbooks integration. It took Habitsoft, Inc. 40 hours of work to complete the project and Habitsoft charges an hourly rate of $100 / hour. Habitsoft sends an invoice to Clarity Accounting with a 30 day term (payment of the invoice is due within 30 days of the date the invoice was created). There was also a 5% sales tax applicable to this invoice.
This is how the data entry fields look like:
After Habitsoft clicks “Add”, it will be given several options:
Download PDF
Click this link to download a PDF of the invoice. Users can add their own logo on the PDF invoice. Please refer to the help file “Uploading logo to Invoices” for instructions on uploading your own logo.
Here is what the PDF invoice for this example looks like:
Please note: Addresses and contact information shown on the invoice will depend on how much information is included when filling out the Business Profile information as well as the Customer information when adding a new customer. You can edit the customer information by going to the “Customer” link on the Dashboard under “Setup”.
Edit
The edit option will bring you to a summary of this particular record, allowing you to change anything you need to change.
Repeat
This option allows you to “repeat” this transaction. Many people use this feature if they are entering an income record with very similar elements such as same customer with the same payment and income accounts. This allows users to make minor changes with date, description, or price without re-entering all the information.
Entering Payments
When Habitsoft receives a payment from Clarity Accounting, it will have to enter the payment into the accounting system with an associated Bank and Income Account. For detailed information on how to add invoice payments, please refer to the help file “Adding Invoice Payments”.
