Long-term, custom work often comes with deposits and mid-project payments. The accounting challenge is keeping your order status, invoices, and revenue timing aligned, especially when a job stays open for months.

In Cetec ERP, two common approaches are prepayments and progress billing. They can look similar on the surface, but they are designed for different situations: cash already received versus invoicing for payment that has not arrived yet.

When Prepayments Are the Right Fit

If you are taking a deposit as cash, prepayments are usually the cleanest option. You post the cash when it hits the bank, and you can track the customer deposit behavior without creating an open invoice that needs to age in accounts receivable.

This approach is a good match when customers pay at the time they send the deposit, or when you do not need an invoice to prompt payment and track the gap between invoice date and payment date.

What Progress Billing Does Operationally

Progress billing is useful when you need to invoice a customer during an active order, while keeping the sales order open and active. It supports projects where you want multiple invoices tied to a single order, for example billing 25%, 50%, and 75% completion on a six-month job.

In Cetec ERP, you create progress invoices from the sales order. Those invoices are applied against the final invoice so the customer is not billed twice for the same work. This helps your billing schedule match the project schedule without forcing you to close the order early.

Revenue Timing and G/L Posting Options

For each progress invoice, you can choose whether to defer income or recognize revenue immediately. Deferring income is commonly posted to a liabilities account such as Customer Deposits, while immediate recognition posts directly to a revenue account.

Required Setup: Progress Invoice G/L Mappings

Progress billing requires three new G/L transaction mappings. Progress invoice transactions will fail if you have not mapped them first in Admin » Config Settings » G/L Transaction Settings » Progress Invoice.

How to Decide Between Prepayments and Progress Billing

Use prepayments when you are already receiving cash and need to record deposits cleanly. Use progress billing when you need to invoice for milestone payments, track aging in accounts receivable, and apply those invoices against a final invoice while the order stays open.

Key Takeaways

• Prepayments are typically the right choice when you are taking cash deposits immediately.
• Progress billing is designed for milestone invoicing when payment will arrive after the invoice date.
• Progress invoices are deducted from the final invoice so billing stays tied to one open order.
• Progress invoices can either defer income to a customer deposits liability account or recognize revenue immediately, depending on how you choose to post.
• Set up the required progress invoice G/L mappings before using the feature.

Conclusion

For long-running jobs, the main question is whether you need to record cash already received or invoice for payment that will arrive later. When you choose the approach that matches how your customer pays, Cetec ERP keeps your order activity, accounts receivable, and revenue timing aligned with the reality of the project.

If you have more accounting questions, search for accounting resources in the Cetec ERP knowledge base.