Down payments and Pro-forma invoices

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Introduction

Managing vendor bills is a key part of tracking your company expenses and ensuring timely payments to suppliers. In Odoo 18, the vendor bill workflow integrates seamlessly with your purchasing and accounting processes, giving you full control from receipt to payment.

This guide will walk you through how to create, manage, and automate vendor bills using Odoo’s Purchase and Accounting apps.

What is a Down Payment?

A down payment is an initial, partial payment made by a customer when confirming a sales transaction. It acts as a financial commitment from the buyer and reduces the risk for both parties. The remaining balance is typically paid upon delivery of goods or completion of services.

In Odoo, down payments are used to manage prepayments on sales orders. This ensures a more streamlined invoicing and payment flow.

How to Use Down Payments in Odoo

When a sales order is confirmed in Odoo, users can create invoices that include down payments by following these steps:

1. Create a Sales Order

Navigate to Sales App → New Quotation.
Add a customer and one or more products.
Click Confirm to convert the quotation into a sales order.

2. Generate a Down Payment Invoice

Click Create Invoice.
In the pop-up, select one of the following:
- Down payment (percentage)
- Down payment (fixed amount)
Enter the desired amount (e.g., 50%) and click Create Draft Invoice.
Odoo generates a draft invoice showing the down payment as a line item.

3. Confirm the Invoice and Register Payment

Click Confirm to validate the invoice.
Select Register Payment, confirm the details, and click Create Payment.
The invoice status will change to In Payment.

4. Generate the Remaining Invoice

When the balance is due:

Return to the sales order and click Create Invoice.
Select Regular Invoice to invoice the remaining amount.
Confirm and register the payment to complete the transaction.

Example: 50% and 100% Down Payments

50% Down Payment: Create a down payment invoice for 50%, then invoice the remaining 50% upon delivery or completion.
100% Down Payment: This is not treated as full payment. Odoo still expects a final invoice to complete the sales order, making it useful for situations where prepayments are standard but not final.

Important Note

If your invoicing policy is based on delivered quantities, and no delivery has occurred, Odoo may not allow the down payment to be deducted. In such cases, a credit note may be issued unless delivery is confirmed manually or via the Inventory app.

Customizing Down Payment Settings

To adjust the income account linked to the down payment product:

Install the Accounting App.
Go to Sales → Products → Down Payment.
In the Accounting tab, update the Income Account as needed.

Additionally, you can define a down payment account at the product category level. This account will be prioritized when creating down payment invoices.

What is a Pro-Forma Invoice?

A pro-forma invoice is a preliminary, non-binding document that outlines the details of a sales transaction before delivery or final billing. It is often used for:

Customs and shipping documentation
Providing an estimate to the customer
Formalizing a quotation

How to Use Pro-Forma Invoices in Odoo

To send a pro-forma invoice in Odoo:

Enable the feature in Sales → Configuration → Settings under Quotations & Orders.
On any quotation or sales order, click Send Pro-Forma Invoice.
Odoo generates a PDF and opens an email composer with the invoice attached.

Note: Once a down payment invoice is created for a sales order, the Pro-Forma Invoice option becomes unavailable for that order.

Comparison: Down Payment vs. Pro-Forma Invoice

Feature	Down Payment	Pro-Forma Invoice
Purpose	Capture partial payment	Provide pre-invoice estimate
Triggers Accounting?	Yes, creates accounting entries	No accounting entries created
Binding?	Yes	No
Editable?	Draft invoice can be edited	Editable before sending
Common Use Cases	Deposits, project advances	Customs clearance, price negotiations

Best Practices

Use down payments to secure large orders and manage partial payments.
Use pro-forma invoices during negotiation or for international shipping requirements.
Adjust invoicing policies according to your business needs (e.g., based on ordered or delivered quantities).
Ensure accurate account mapping for down payments to simplify financial reporting.

Conclusion

Down payments and pro-forma invoices are essential tools for modern businesses. Odoo simplifies both processes, offering users a clear path to managing prepayments and generating early-stage sales documents. Whether you’re taking deposits or providing quotes, Odoo offers the flexibility to support a wide range of sales workflows.

Down payments and Pro-forma invoices

Introduction