3. Initial Invoicing & Deposit Receipting (Milestone 1: 50%)

This guide details the crucial financial gateway in Edge Home Solutions: issuing the 50% Advance Deposit Invoice from the signed Sales Order, ensuring Kenyan eTIMS/VAT compliance, and recording the customer Payment Entry to unlock procurement and workshop production.

---

1. Natural System Flow Position

flowchart LR
    A["1. Lead Intake & 3D Survey"] --> B["2. Quotation & Contract"]
    B --> C["📌 3. 50% Deposit Invoicing & Receipt"]
    C --> D["4. Project Execution & Workshop"]
    D --> E["5. Progress/Final Invoicing & Closeout"]
    style C fill:#2563eb,stroke:#1d4ed8,color:#ffffff

🖥️ Live ERP Desk Screens for Step 3

• 🧾 Create New Sales Invoice Screen — Draft the 50% advance deposit invoice.
• 📋 All Sales Invoices List — View all billed, paid, and overdue client invoices.
• 💵 Create New Payment Entry Screen — Record a customer bank/M-Pesa payment receipt.
• 💰 All Payment Entries List — View verified payment receipts and transaction IDs.
• 📊 Accounts Receivable Summary — Monitor client balances in real-time.
• 🏦 Chart of Accounts Tree — Inspect bank ledgers, income, and receivable accounts.

---

2. Why Deposit Invoicing Precedes Project Execution

In custom interior manufacturing and architectural joinery, raw materials (marine plywood, moisture-resistant MDF, high-gloss acrylic sheets, Blum/DTC soft-close runners, and engineered quartz slabs) require substantial upfront working capital.

[Sales Order Confirmed]
        ↓
[Generate Milestone 1: 50% Deposit Invoice]
        ↓
[Customer Pays via Bank Wire / M-Pesa]
        ↓
[Record Payment Entry / Official Receipt]
        ↓
🚀 UNLOCKS: Material Purchasing & Workshop Project Execution

---

3. Generating the Milestone 1 (50% Deposit) Sales Invoice

Step-by-Step Procedure:

1. Open the confirmed Sales Order (or navigate to Accounts → Sales Invoice → + Add Sales Invoice at Sales Invoice List).
2. Click Create → Sales Invoice.
3. In the Payment Schedule section:
   • Verify that Milestone 1: EHS 50% Advance Deposit is highlighted.
   • The invoice amount will calculate to exactly 50% of the total order value.
4. Taxes & eTIMS Compliance:
   • Verify Kenyan VAT 16% is calculated if applicable.
   • Confirm customer KRA PIN is attached for eTIMS fiscalization.
5. Click Save and Submit.
6. Click Print to export the official Edge Home Solutions Tax Invoice with bank payment details (KCB / Equity / M-Pesa Paybill).

---

4. Recording the Payment Entry (Official Receipt)

When the client deposits the funds into the company bank account or sends via M-Pesa:

Step-by-Step Payment Entry:

1. Open the submitted Sales Invoice (or go to Accounts → Payment Entry → + Add Payment Entry at Payment Entry List).
2. Click Create → Payment.
3. ERPNext automatically populates the receipt fields:
   • Payment Type: Receive.
   • Party Type: Customer.
   • Party: Customer Name.
   • Company: Edge Home Solutions.
   • Paid Amount (KES): Exactly 50% deposit amount.
   • Account Paid To: Select company receiving account:
     • KCB Bank Current Account - EHS
     • Equity Bank Main Account - EHS
     • M-Pesa Business Till / Paybill - EHS
   • Cheque / Reference No: Bank transaction reference code or M-Pesa 10-digit transaction ID (e.g., QKJ872B5ZX).
   • Cheque / Reference Date: Date of payment receipt.
4. Click Save and Submit.

TIP

Automatic Account Allocation: Submitting the Payment Entry instantly clears the 50% accounts receivable, updates the bank ledger, and generates a downloadable Official Payment Receipt for the client.

---

5. Deposit Confirmation & Handover to Operations

Once the 50% deposit Payment Entry is submitted:

1. Finance tags the Sales Order status as Deposit Received / Ready for Production.
2. Project Manager receives automated notification to initialize the 12-task pipeline and issue material purchase requisitions.

---

6. Next Step in System Flow

➡️ Proceed to 4. Project Management & Joinery Execution