When a bank is providing funds for a project, sometimes you will have the bank pay the committed amount and the client pay out-of-pocket for any overages due to their selections beyond the original budget. To handle this, you'll effectively have two payments for a given invoice.
For example, if you are invoicing for completed work on all the Plumbing work in a project (like in this example), you can create an invoice and track a Bank Draw against it; if there is an overage, you can request your client pay the rest.
First, go to your project's Finance > Invoices section and create an invoice for the scope you just finished. Following the below steps, your invoice will be covered by the bank draw and the remainder will be sent to the client to pay out-of-pocket.
1. Create an invoice for the completed scope of work, then "Enter Payment"
You will manually enter a payment to represent the bank's contribution towards this piece of scope that was completed.
2. Enter the amount the bank is paying
3. Select Payment Type
4. Select "Bank Draw"
This will note that this payment was a bank draw. Enter any reference number of memo as needed.
5. Click "Save Payment" to count this money towards the invoice balance
The remainder will be due from the client to be paid out-of-pocket.
6. Click on "Request payment of balance" so the client can pay the overage
7. Click "Request" to send the invoice for the client to pay the remaining balance.
Now the client can pay the balance out-of-pocket, using ACH, Credit Card, or Wire Transfer. As a result, once they've done this, this piece of completed scope has been paid by a combination of bank draw and by the client (for any overages above the initial estimate).
