Billing Management: #4 Negate Risk Free with Advances

Billing Management: #4 Negate Risk Free with Advances

In the last post, we explored how unbilled charges accumulate before being invoiced. But what happens when businesses need money before service begins?

​
Picture this: A construction company takes on a $500,000 commercial building project expected to last 12 months. The first step is sending the client a detailed quote. Once accepted, the builder requires a 20% advance before breaking ground. This advance payment doesn't represent complete work; it secures raw materials, labour, and permits to get the project moving. The client feels reassured that the project will start on schedule, while the builder gains the cash flow needed to set everything in motion.
​
This is the essence of advance billing. Unlike unbilled charges raised after usage or delivery, advance billing ensures businesses have funds available before or during service execution, reducing the risk and ensuring smooth operations.

This post will explore the nuances of advance billing and the best way to handle it.

 

Types of Advances 

Across industries, businesses collect advances in different ways depending on their needs: Advance Invoices, Security Deposits or Retainers, Prepaid Subscriptions, Down Payments, Reservation or Booking Advances, and so on. Though these advances carry different names and practices, they all represent the same principle: to secure funds upfront before service fulfilment.

 

When do businesses need/use Advance Billing?  

Businesses rely on advance billing in two situations:

  • Before a Project or Subscription Begins- Customers agree to pay in advance, securing their commitment and giving the business working capital.

  • ​Ahead of a Billing Cycle- Customers make payment before the cycle starts, allowing businesses to run smoothly with guaranteed funds.

Let's look at some real-time use cases where Advances becomes handy.

 

​Scenario 1: Hospitality Bookings 

A corporate client plans a $50,000 retreat at a luxury resort six months in advance. To confirm the booking, reserve rooms, and coordinate vendors, the resort requires a 20% upfront payment. Without this, the business would risk blocking dates without certainty of the client's commitment. By collecting advance payment, the resort secures the funds and the assurance that the event will occur.

 

​Scenario 2: Consulting Project 

A consulting firm signs a $120,000 strategic engagement with a client. Before the project begins, the firm must dedicate senior consultants, purchase specialized research reports, and reshuffle schedules. Covering these costs and securing the client's commitment requires a 30% payment before the project process. This advance ensures the consulting team can jump into the work with resources ready rather than worrying about delayed payments or last-minute cancellations.

 

​Scenario 3: SaaS Annual Prepayment 

A SaaS platform charges $2000 per month for its enterprise plan. Instead of paying month by month, a client chooses to prepay the entire year for $24,000. This advance means guaranteed revenue and reduces churn risk for the SaaS provider. For the client, it simplifies budgeting and often comes with a cost benefit or a discount. The advance serves as a year-long commitment on both sides.

 

​Scenario 4: Online Training  

An education company launches a six-month course at $500 per month. Before the end of the month, the training institute sends a payment link to ensure that students pay ahead of the renewal cycle. This advance confirms students' continuity and allows the institute to plan the resources properly.

 

Beyond the four different businesses, advances or credits are vital in Construction and infrastructure, Professional services, Education and training, Healthcare, Travel agencies, and many more.

 

The first and second scenarios are one-time deliverable tasks: a one-time booking and a consulting project. They require an advance invoice to collect payment, which will be adjusted against the total amount. This invoice should not necessarily be part of the usual invoice, as it will be applied against the total when the service is delivered.

 

When you look at the other two scenarios, they are subscription-based and typically billed either ahead of the billing cycle or as an advance while the subscription is in progress.

 

Bail out with Zoho Billing

Across these cases, businesses face two recurring needs:

  • Sometimes advances must be invoiced upfront- for cases like consulting retainers or SaaS prepayments.

  • ​Sometimes, advances are commitment payments held as credits, such as event deposits, manufacturing down payments, or hospitality booking advances.

Zoho Billing's Advance Billing & Retainers are carefully built to handle:

  1. ​Retainer Invoice for One-time & Projects: Businesses can raise invoices for upfront retainers, record the payment, and apply it to the final bill.
  2. Advance Invoices: Businesses can raise a valid taxable invoice for upfront payment and track it until adjusted.
  3. Advance Payment Request: Businesses can collect money securely through a payment link as credits and apply it later to the final bill.

Zoho Billing stands out because retainers can be applied to an invoice anytime it is created. On the other hand, in a subscription-based ecosystem, advanced billing does not disrupt the regular billing cycle. Invoices are still raised on schedule, monthly, quarterly, or annually.

​
The difference lies in how payments are applied. Advances are automatically adjusted against invoices, ensuring that businesses always receive funds in advance while customers continue to receive their regular bills accordingly.


Billing Spectrum 

Adopting advanced billing allows businesses to create financial stability and secure customer commitment early on. This naturally sets the stage for usage-based billing, where charges depend on actual consumption. Unbilled charges, advance billing, and usage billing complete the billing spectrum for modern revenue management using Zoho Billing.

 


Notes
Our next stop will be at Usage Billing. Stay tuned!

 

    • Sticky Posts

    • Community Learning Series | Digest #5 — September 2020

      Dear customers, We're happy to bring you the September edition of our #CommunityDigest! Keep track of your subscription KPIs right from your smartphone: Last month, we enhanced our Android mobile app to help our customers get daily updates on their business health. We got to know from a lot of customers that this has made their job much more easier because they no longer have to keep a reminder to manually check on the previous day's revenue or activations. If you have not downloaded it yet, here's

    • Community Learning Series | Digest #4 - August 2020

      Dear customers, We hope you're staying safe and healthy. I'm happy to bring you the fourth edition of our #CommunityDigest with some brand-new updates from us. 1. Daily Business Updates (for Android users) The Zoho Subscriptions Android app has got a cool new update: You can now get a push notification to your smartphone that lets you know how many activations and cancellations have taken place, and what's the net revenue for the previous day. The best part is, you can tell the app when exactly you

    • Community Learning Series | Digest #3 - July 2020

      Dear customers, We hope you're staying safe and healthy. We're glad to bring you the July edition of our #CommunityDigest. New community members can view our previous newsletters here. This time, we have two major updates and three interesting topics for you: 1. Zoho Subscriptions Developer Community Since the inception of Zoho Subscriptions, our team believed that the recurring billing platform we provide should be able to offer an extensive API library that empowers businesses to automate most

    • Introducing: Community Learning Series | Digest #1 - May 2020

      Dear customers, We hope you are staying safe and healthy. Helping businesses manage their customer subscriptions more efficiently has always been, and always will be, our goal at Zoho Subscriptions. We strongly believe this is possible if we grow together as a community and share what we know with each other. To nurture this shared learning experience, here is our brand-new Community Learning Series! ​ Welcome to the first edition of our digest! Each edition of our community digest includes guides

    Nederlandse Hulpbronnen


      • Recent Topics

      • Notes created in mobile can no longer be accessed in desktop

        Working with a 2013 Mac running OS 10.14.6; Desktop Notebook version 4.5.3. Using Motorola Moto G Power 5G - 2024; Android app version 6.7 I have been using Notebook for some years. Starting several weeks ago, the notes newly created ion the phone can

      • Function #49: Manage varying installment payments using Zoho Books

        . Hello everyone, and welcome back to our series! Last week, we discussed automating the collection of fixed installment payments in Zoho Books. But what if your payment structure involves charging varying percentages of the invoice total as installments?

      • Zoho Writer - Option to Export as .zdoc format

        I've noticed that it's not possible to export a Zoho Writer Document in the .zdoc format. Isn't zdoc, Zoho Writer's own format? My use case is that I sometimes need to create quite complex documents with floating elements, which sometimes need to become

      • Is it possible for contacts to "Re-enter" a workflow in Zoho Campaign?

        We are currently working on a way to automatically add users to from one list to other lists based on specific criteria, but can't seem to find a native way of doing this so we are trying to use Workflows to do this. So, for example, if a user's status is set to "Active," then they should be added to the list "Active Users." If the same user's status is then set to "Paused," they should be added to the list "Paused Users" and removed from the list "Active Users." This works fine for the first go

      • Bulk upload images and specifications to products

        Hi, Many users have asked this over the years and I am also asking the same. Is there any way in which we can bulk upload product (variant) images and product specifications. The current way to upload/select image for every variant is too cumbersome.

      • Out of Office for Just One of My Alias Email

        Can I set up the Out of Office Reply for Just One of my Alias Email Addresses?

      • Can I map multiple Surveys into the CRM using the same fields?

        Hello, We are a healthcare practice that offers two distinct services (Nutrition and Primary Care). We use Zoho Survey for our lead generation form (Get Started Survey), which allows people to express interest in one of the two services and even allows

      • Dealing with API responses where integers have more than 16 digits

        Hi there How do I deal with an api response contaning an int or float with more than 16 digits (before any decimal places for a float). I constantly receive the response "Unable to cast the 'BigInteger' value into a 'BIGINT' value because the input is

      • Can't change form's original name in URL

        Hi all, I have been duplicating + editing forms for jobs regarding the same department to maintain formatting + styling. The issue I've not run into is because I've duplicated it from an existing form, the URL doesn't seem to want to update with the new

      • Need Inactive accounts to be visible in Reports in Zoho Books

        I N=need Inactive accounts to be visible in Reports in Zoho Books to do recons of the accounts but when i see the same they are not visible in the Accountant - Account Transactions report

      • unblock e-mail

        please unblock my e-mails info@meatnews.gr and myrtokaterini@meatnews.gr

      • Add Zoho Mail for users who do not need Zoho One

        We have licenses for ZOho One for teams that need to use the suite of products that Zoho One offers.  We have 8 more people who only need email access and we would like to add just a Zoho Mail.  They do not need the Zoho One license.  We are currently

      • ZML vs HTML Snippet - which is better?

        Are there certain use cases where one is better than the other?

      • Auto CheckOut Based On Shift.

        This Deluge script runs on a scheduled basis to automatically set the 'Actual_Check_Out' time for employees who haven't manually checked out. If the current time is past their scheduled 'Shift_End_Time', the script updates the check-out time to match

      • How to remove some users in zoho accounts

        How to remove some users in Zoho accounts.

      • Infinite loop of account verification

        Hi I can't do anything on my zoho account.  I always get this message Hi Sheriffo Ceesay As a security measure, you need to link your phone number with this account and verify it to proceed further. When ever I supply the details, it displays that the number is associated with another account. I don't have any other account on zoho so this is really annoying. 

      • Load PO_Date field (Purchase Order) with current date in Deluge

        Hi, I'm not a full time developer, just helping to customize our CRM, in the small company I work for. There must be something wrong with me, because I can't do something so simple as complete a field with the current date in a function using Deluge.

      • Zoho CRM in Microsoft Power Automate Custom Connector

        Hi everyone, I’m building a Power Automate flow that integrates Microsoft Bookings with Zoho CRM. The goal is to automatically create a meeting (event) in Zoho CRM whenever a new appointment is booked via Microsoft Bookings. To achieve this, I created

      • Spell check sucks

        Come on guys, it's 2024 and your spell check is completely retarded. You gotta fix it.

      • How to include total km for multiple trips in expense report.

        Whenever I create a mileage report it only shows the total dollar amount to be reimbursed. The mileage for each individual trip is included but I also need to see the total distance for all trips in a report? How do I do this?

      • Outgoing blocked: Unusual activity detected.

        I just made payment for my Zohomail Today and have been debited so i will like to be Unblocked because this is what it says (Outgoing blocked: Unusual activity detected) Thank you i await your swift responses

      • Zoho One Login Issue - Unable to receive OTP

        Hi Support Team, I am experiencing a unique login issue with Zoho One. I am attempting to log in from India using Zoho Login credentials provided by a USA-based client. Their Zoho account is hosted on a US data center. After entering the username and

      • Question Regarding Managing Sale Items in Zoho Books

        Good day, I was wondering about something. Right now, Zoho Books doesn’t seem to have a way to flag certain items as being on sale. For example, if I want a list of specific items to be on sale from October 1 to October 12, the user would have to export

      • In the Zoho Creator Customer Payment form i Have customer field on select of the field Data want to fetch from the invoice from based on the customer name In the Customer Payment form i Have subf

        In the Zoho Creator Customer Payment form i Have customer field on select of the field Data want to fetch from the invoice from based on the customer name In the Customer Payment form i Have subform update Invoice , there i have date field,Invoice number

      • Problem of Import Client Users From CRM and or Expense

        I am premium plan user on Projects. I have about 500 customers on Expense and CRM that integrated with each other. According to at below link, I am trying to import clients from CRM, system not allowed to select any customer. If I import from Expense,

      • Unable to see free plan option

        Hello Zoho Support Team, I hope you are doing well. I am trying to sign up for Zoho Mail, but I am unable to see the option for the free plan. Could you please guide me on how I can access or activate the free plan? Thank you for your assistance.

      • unblock my zoho mail account. outlines@zoho.com

        please unblock my zoho mail account, outlines@zoho.com

      • domain not verified error

        Hi when i try to upload a video from zoho creator widget to zoho work drive iam getting domain not verified error.I don't know what to do .In zoho api console this is my home page url https://creatorapp.zoho.com/ and this is my redirect url:www.google.com.Iam

      • equest to Disassociate Bigin from Zoho One and Migrate to Standalone (Upgrade to Bigin Premier – 3 Seats, Annual)

        Dear Zoho One Support Team, I’m writing to request your assistance to disassociate (remove) the Bigin application from our Zoho One organization while preserving all existing Bigin data. After the disconnection is successfully completed, we intend to

      • SMTP email sending problem

        Hello, I've sent emails before, but you haven't responded. Please respond. My work is being disrupted. I can't send emails via SMTP. Initially, there were no problems, but now I'm constantly receiving 550 bounce errors. I can't use the service I paid

      • billing

        hi, I am being billed $12/year, and I can't remember why. My User ID is 691273115 Thanks for your help, --Kitty Pearl

      • How to add receipts

        How to add receipts

      • Unable to enable tax checkboxes

        Hi Zoho Commerce Support, I'm writing to report an issue I'm having with the tax settings in my Zoho Commerce store. I've created several tax rates under Settings > Taxes, but all of them appear with the checkbox disabled. When I try to enable a checkbox,

      • Zoho Commerce - Enable Company Name and Tax Number collection for B2B orders in Global Edition

        Please enable Company Name and Tax Details option on checkout settings in Zoho Commerce Global Edition. It is still important to collect Company Name and Tax Number for B2B sales in many countries. My business is based in Ireland (in the EU) and I have

      • ZohoSign and ZohoBooks Integration/Workflow

        Hello All, We utilize ZohoSign for signatures on tax eFiles. We utilize Dynamic KBA. Additionally, we use ZohoBooks for invoicing for these services. Is there a way to accomplish the following: Send a copy of the Tax Return, Invoice and eFiles in one

      • Manage monthly tasks with projectsf

        Hi All I run a finance and operations team where we need both teams to complete monthly tasks to ensure we hit our deadlines. Can Zoho projects be used for this. There many finance focused tools but we have Zoho one so want to explore Thanks Will

      • Zoho Suite is very slow

        Since today Zoho is incredibly slow over all applications! What's going on?

      • How can I track which zoho users are actively using Zoho CRM

        I have several licenses of Zoho CRM. We now need to add a new user. I could purchase a new license, but before I do, I would like to see if any of our existing users are not actively using the license assigned to them. How can I determine the activity

      • Is anyone else having trouble saving a custom image in their email signature, or is it just me?

        When I try to save the image I get an error that says "Operation Failed" I opened a support ticket two weeks ago and received a response that it would be debugged, but it still isn’t working

      • Combine and hide invoice lines

        In quickbooks we are able to create a invoice line that combines and hides invoices lines below. eg. Brochure design         $1000 (total of lines below, the client can see this line) Graphic Design           $600 (hidden but entered to reporting and

      • Next Page