Recurring Invoices (Basic): Create, Schedule, Save as Draft

With recurring invoices, you can request payment authorization from your clients and get paid automatically at routine intervals. This can help you with all your clients who order services on a consistent basis. Here, find out all the details about creating recurring invoices.

Covered here:

• Creating and sending recurring invoices
• Recurrence settings
  • Custom schedules
• Payment authorization types
  • Automatic payment
  • Manual payment of invoice
• Setting up recurring invoice reminders
• Saving recurring invoice as draft
• Duplicating recurring invoices
• What clients see when you create recurring invoices
• Who can sign a recurring invoice
• What happens if the client signs after the first invoice date
• What happens if an automatic payment fails?

Creating and sending recurring invoices

Recurring invoices can be created and sent by a firm owner or any team member assigned to the account with access rights to manage invoices. 

You can create recurring invoices alone or include them in your proposals or proposal templates. You can also create recurring invoices from the services listed in the proposal.

Follow these steps:

1. Click the + New button in the left sidebar, then select Invoice from the slide-out. Or add an invoice to the proposal.

2. Select the account for which the recurring invoice should be issued.

3. Set the Invoice type to Recurring, then either enter a Name for it (choose a client-facing name for invoices with payment authorization) or select a template. If a template is selected, then proceed to step 7.

4. Select how often the invoices should be sent (set to Monthly by default) and how many times they should recur.

5. Choose a payment method: this is how you want your invoices to be paid (either by credit card, bank debit or both)

6. Enter the amount of each invoice either by entering it into Subtotal or adding up the line items.

7. Then click Create to send the invoice. Once a recurring invoice with payment authorization is accepted, a notification is sent to your email and Inbox+.

There are other details you may want to include. See detailed instructions for each numbered field below:

1. Invoice type: For a recurring invoice, select the appropriate option. 

2. Account name, ID or email: Select the account where the invoice will be sent.

3. Invoice template: Click and select one of the recurring invoice templates you’ve created from the pull-down menu. Recurring invoice templates are especially useful for invoices you send to clients on a regular basis.

4. Choose a payment method: This is how you want your invoices to be paid (either by credit card, bank debit or both). We support a number of payment methods.

5, 6. Starts on: This is when the first invoice is sent to the client after they have agreed to the recurrence. This may be upon acceptance (for recurring invoices with payment authorization only) or on a specific date. If a Specific date is chosen, then you need to select it under First invoice date.

7, 8. Recurrence(s):  Here you can select the invoice repeat period and set the number of invoices that will be sent within the scope of the recurring invoice.

9. Team member: Select the team member who is responsible for receiving the payments (by default, it is the person who creates the invoice).

10. Name:  The name of the recurring invoice (e.g. Bookkeeping 2023 or Financial Planning 2024). The client will see it only for recurring invoices with payment authorization.

11. Description:  Add a description outlining what is included in the invoice (optional).

12, 15. Add shortcode: Include dynamic data to individualize your invoices. You can use account shortcodes based on custom fields and date shortcodes. Here's more on shortcodes.

• Automatic payment: after the client accepts the recurring invoice terms, invoices will be issued according to your schedule, and the client's card/bank account will be charged automatically. Available for Stripe only.
• Manual payment of invoice: invoices will be issued and sent to the client according to your schedule, but they will need to pay them manually each time.

Read more on payment authorization types below.

14. Email invoice to the client:  Toggle this on and add a custom message if you want the client to be notified by email about a recurring invoice with automatic payment. Otherwise, they will only receive a notification in their portal.

16. Reminders: Toggle this on to send an email notification to the client when they don’t accept the recurring invoice within a specified number of days (more details below).

17. QuickBooks settings: Select Location for the invoice to be sent to QuickBooks. Clients will not see this field.

18. Line items: Itemize the services performed for each invoice of the recurrence, as well as any discounts applied. 

• Line item: Click Line item, then either select an existing service or create a new one. Fill in the Rate field, set the quantity for each service and the tax rate (more on tax rates), and add a Description (optional). Select the Class to be sent to QuickBooks (clients will not see this field).
• Discount: To add a line item, click Discount, then fill in the Rate field. 

You can also edit the same line item fields from the  Edit item page by clicking the three dots to the right of the line item, selecting Edit, then clicking Save.

19. Summary: Here, you can see the amount of each payment.

• Subtotal: The sum of the services provided in each invoice, before tax. This is filled automatically after the line items are added. Or, you can enter the sum manually if you don't want to add line items.
• Tax Rate: Once sales tax is added, it’s reflected in the total (more on adding sales tax).

20. Payment schedule: Review the dates when each of the invoices will be sent. 

21. Each payment, Invoice amount, Total: Review the main settings of the recurring invoice: how many payments you are expecting, the amount of each, and the total.

22. Create: Click to send the recurring invoice for the client to review and accept.

23. Save as draft: Save your changes without sending the recurring invoice: settings are saved, and the recurring invoice is visible under the Recurring Invoices tab in the Invoices section and marked as Draft. You’ll still be able to review and edit the invoice and add or delete fields. The invoice isn’t visible to the client until you hit Create.

Recurrence settings

Recurrence settings in detail:

• Recurrences: sets the number of invoices that will go within the scope of recurring invoice
• Recurrence: sets the invoice repeat period:
  • Daily
  • Weekly
  • Monthly
  • Every 3 month
  • Every 6 month
  • Yearly
  • Custom (see below)

You can review and edit the invoice recurrence settings anytime by going to your  Recurring invoices list and opening it.

Here are some examples of what you will get by selecting different schedule settings :

Custom schedules

Custom schedules allow you to tweak recurring invoice schedules even more, depending on your needs. Schedule invoices to recur at whatever frequency you want; e.g., on the 25th every 4 months, bi-monthly, every second Tuesday, etc.

To set up the custom recurrence settings, select the Custom option in the Recurrence drop-down.

Here are the options to set to create custom schedules:

• Starts on: This is when the first invoice will be sent to the client after they have agreed to the recurrence. This may be on a specific date or on acceptance.
• First invoice date: the date when the first invoice will be created (available if a Specific date is chosen).
• Issue invoice every: the number of time periods between each invoice.
• Time category: this field specifies the time period — days, weeks or months.
• Number of recurrences: the number of invoices to be sent.

You will also see the expiration date — the date when the last invoice should be paid according to the schedule.

Payment authorization types

With recurring invoices, you can select whether you want the payments to be authorized and then proceeded automatically or not. Below, we have a more detailed description of how it works.

• Automatic payment - client accepts the recurring terms, then their card/bank account is charged automatically according to the schedule. Available for Stripe only.
• Manual payment of invoice - invoices are issued and sent to the client according to your schedule, and they will need to pay manually each time. Available for Stripe and CPACharge. If you have CPACharge selected, you will not be able to select payment authorization, and manual will be the only option.

Automatic payment

When automatic payment is selected, the client authorizes the payment once, and all the next payments happen automatically. Recurring invoices with automatic payments are akin to a subscription -- once set up, no further actions are needed from either you or the client.

Let's see what it looks like on the client side:

1. Firm owner or team member prepares a recurrent invoice. The client receives a notification.

2. Client with signatory authority reviews the terms, submits payment details, then signs and accepts the recurring invoice.

Once done, the card/account will be charged automatically in accordance with the schedule outlined in the recurring invoice.

Attention! To use this type of authorization, Stripe should be selected as the default payment provider.

Manual payment of invoice

When the manual payment of invoices is chosen, invoices are issued and sent to the client according to your schedule, and clients need to pay the invoices manually each time. If you have CPACharge selected, you will not be able to select payment authorization, and manual will be the only option.

All issued invoices will work as one-time invoices — they will be shown in the  Invoices tab of the Invoices page and if QuickBooks Online is connected, they will be synchronized within a day of being issued. At the same time, the schedule will be available for review and editing in the Recurring Invoices tab. 

Let's see what it looks like on the client side:

1. Firm owner or team member prepares a recurring invoice, and the client receives a notification on each invoice issued. When manual payment is selected, the client doesn't see the invoice as recurring on their side. 

2. Client pays the invoice manually as they would a regular invoice.

3.  When a certain date comes up, a new invoice is issued to the client according to the schedule, and they once again have to pay it manually. This is repeated until all invoices are sent according to the schedule.

Setting up recurring invoice reminders

While creating a recurring invoice, toggle on Reminders. When you do, the client is sent a reminder about the invoice if it has not been accepted within a certain time frame; the default number of days is three, but you can change that:

• Days until next reminder: This is the number of days before the client is sent a reminder. By default, a reminder is sent three days after an invoice is issued, but you can change that to whatever you prefer.

• Number of reminders: This is the number of reminders sent the client. By default, the client gets only one reminder email, but you can also change this as well.

Reminders stop when:

• The client hasn’t accepted the recurring invoice, but the set number of reminders have been sent.
• The client accepted the invoice.
• The pending invoice was deactivated by a firm member.

Saving recurring invoice as draft

In some cases, preparing a recurring invoice may take time (e.g., you are still working out the terms with the client). You can save all your changes without sending this invoice to your client by clicking the Save as draft link.

Once done, you will be able to find the recurring invoice in the Inactive subtab of the Recurring Invoices tab in the Invoices section. These invoices are marked as Draft.

To view draft invoices for a specific client, go to  Clients, select the account, then go to the Recurring invoices subtab of the Invoices tab from their profile. The Invoices tab in the client’s profile is available to the firm owner, admin or any team member with the Manage invoices access right.

When the recurring invoice is saved as a draft, you are still able to review it and add or delete fields. The draft invoice will be not visible to the client until you hit  Create.

Note! The balance column for draft invoices will display $0.00 until you create and send the recurring invoice. Balance is the sum of unpaid invoices in the recurrence.

Duplicating recurring invoices

To create a copy of an existing recurring invoice, go to the Recurring invoices tab of the Invoices page or the Recurring invoices subtab of the client account's Invoices tab, click the three dots to the far right of the invoice name and select Duplicate from the pull-down.

You will see the  Create invoice page with all the details of your original invoice already filled in. Click the Create button or edit it the way you see fit.

What clients see when you create recurring invoices

Your client can view and sign recurring invoices by either clicking the notification on their dashboard, clicking the link in their email notification, or clicking the link on the Recurring Invoices page of their portal. 

Then, they will be presented with a simple form where they will be able to review the details, add payment information, and sign. 

If you want to see TaxDome how the client sees it, access a read-only view of their portal.

Who can sign a recurring invoice

When you send a recurring invoice, all contacts linked to the account with the signatory authority enabled are allowed to sign from their client portal. 

To make the recurring invoice active, only one contact needs to accept it. So, make sure that signatory authority is disabled for the contacts that are not allowed to sign (e.g. children).

What happens if the client signs after the first invoice date

If a client signs a recurring invoice with payment authorization after the first invoice date is passed, all missed invoices will be generated and automatically charged to the client. For example, if the recurring invoice starts on September 25th but the client signs it on October 26th, they will be charged for missed invoices from both September and October.

If the client's selected payment method does not have sufficient funds, TaxDome will make multiple attempts to charge payments. However, the client will always have the option to pay the invoices if they choose to do so manually.

What happens if an automatic payment fails?

If there are any issues with payment processing such as insufficient balance in the client's bank account or other processing errors that prevent the payment from going through, the system will automatically attempt to retry the payment up to four additional times:

• 4 hours after the first unsuccessful payment
• 24 hours after the last attempt
• 48 hours after the last attempt
• 72 hours after the last attempt

If all four attempts are unsuccessful, the client will have to update their payment details. Once they have done so, future payments will be charged automatically.

Note! For bank debit payments, the standard processing time is up to 30 days, which is ample time to ensure that the payment is processed successfully. If the payment fails during this time, it will be retried once the  payment status changes from "Processing payment" to "Failed."