Invoice Life Cycle

Life Cycle Overview

The invoice life cycle outlines the different statuses an invoice can transition through from creation to completion. This diagram provides a clear representation of the various stages and transitions in the life cycle of an invoice. Below is the detailed explanation:

CREATED

• Description:
  • This is the initial stage of an invoice. The invoice is created but not yet finalized or shared with the customer.
• Actions:
  • Edit and make changes to invoice details like customer information, item details, and payment terms.
  • Save the invoice as a draft for future use or further editing.
• Possible Transitions:
  • Scheduled: The invoice is scheduled to be sent at a later date.
  • Sent: The invoice is finalized and sent to the customer.
  • Voided: The draft is discarded and marked as void.

SCHEDULED

• Description:
  • The invoice is finalized and scheduled to be sent to the customer at a specific date and time.
• Actions:
  • Configure a send date for the invoice.
  • Make minor edits or cancel the schedule.
• Possible Transitions:
  • Sent: The invoice is successfully sent to the customer.
  • Draft: The scheduling is canceled, and the invoice is reverted to a draft.
  • Voided: The scheduled invoice is canceled and marked as void.

SENT

• Description:
  • The invoice is sent to the customer and is awaiting payment.
• Actions:
  • Customers can view the invoice and proceed with payment.
  • Business owners can track the status of the invoice.
• Possible Transitions:
  • Paid: The invoice is fully paid.
  • Overdue: The payment due date is missed.
  • Voided: The invoice is canceled after being sent.

OVERDUE

• Description:
  • The invoice remains unpaid past the due date.
• Actions:
  • Send reminders to the customer for payment.
  • Apply late fees or penalties (if applicable).
• Possible Transitions:
  • Paid Late: The customer pays the invoice after the due date.
  • Voided: The invoice is canceled despite being overdue.

PAID

• Description:
  • The invoice is fully paid by the customer.
• Actions:
  • Issue a receipt or acknowledgment to the customer.
  • No further actions required unless a refund is requested.
• Possible Transitions:
  • Partially Refunded: A partial refund is issued for the payment.
  • Refunded: The full amount is refunded to the customer.

PAID LATE

• Description:
  • The invoice is paid after the due date.
• Actions:
  • Apply any late payment penalties (if applicable).
  • Mark the invoice as "Paid Late" for tracking purposes.
• Possible Transitions:
  • Partially Refunded: A partial refund is issued for the payment.
  • Refunded: The full amount is refunded to the customer.

PARTIALLY REFUNDED

• Description:
  • A partial refund is issued for a previously paid invoice.
• Actions:
  • Specify the refund amount and reason.
  • Issue the partial refund to the customer.
• Possible Transitions:
  • Refunded: The remaining amount is refunded, completing the full refund process.

REFUNDED

• Description:
  • The entire amount of the paid invoice is refunded to the customer.
• Actions:
  • Issue the refund and update the invoice status.
• Possible Transitions:
  • None (final state).

VOIDED

• Description:
  • The invoice is canceled and is no longer valid.
• Actions:
  • Mark the invoice as void to prevent it from being processed further.
• Possible Transitions:
  • None (final state).

Summary of Invoice Statuses

This invoice life cycle ensures a clear and organized process for managing invoices at every stage, enhancing both business efficiency and customer satisfaction.