(MF-4) Payment Allocation

Okay! So from the previous lessons, we have learned what invoices and payments are, how to manage them in Workshop Angel, and the concept of how they are related through the process of "allocation".
In this lesson, we will look at this allocation process in more detail, with examples of different allocation situations and how you manage these within the app.

Allocations - The Basics

You will recall from lesson MF-1 that an allocation defines which payment is for which invoice. We also discussed that because in the real world it may not be quite that simple, that it is more accurate to say that:
An Allocation defines which part of a Payment is for which Invoice.
In most cases, a payment will be made which is all, or an agreed part of, what still needs paying for an invoice. However, the way that allocations work in Workshop Angel allows you to manage your payments no matter what situation arises.

Creating a Activity to Experiment With Financial Features

Let's create an activity where, in Test Mode, we can work through lots of examples of different financial scenarios.
  • Create an Activity called "Finance Examples Workshop" with a start date a few months in the future, and update the descriptions on the Basics Tab of the Activity to represent this name and date description.

Scenario 1 - Payment Amount Equals Invoice Amount

One of the most common scenarios is when a client books and pays the full amount due for their booking. In this case, the booking/invoice amount will be the same as the payment amount, and a simple allocation for that amount will link the two.
Here is a simple example:
We have the Booking/Invoice X for 100, a Payment A for 100, and an Allocation saying that "100 of Payment A is allocated to Invoice X". The Invoice is "Fully Paid". The Payment is "Fully Allocated".
In virtually every situation, this allocation process will be managed for you.
Let's create that scenario in our Finance Examples activity.
  • In Test Mode, add an attendee called "Freddy Full" to the activity, and give him a fictitious email address. Have him pay for the activity at the time of booking via a card payment.

How to View The Payment Allocation Status

Allocations are the property of a Payment, so we can see the allocation status by viewing a Payment.
  • Select the Payment for Freddy Full from the Bookings - Payments view
Following the basic details about the payment itself, you can see the information about the Payment's status and Allocations.
This Payment represents the example we looked at earlier. You can see that the Payment has a status of Fully Allocated, and that the full amount of 100 has been allocated to his specific invoice for the activity, which now has a status of being Fully Paid.

How to View the Invoice Payment Status

An invoice's payment status is a function of whether there are enough Allocation amounts from Payments to cover the amount the invoice is for. To view this information for Freddy Full:
  • Go to the Bookings - Payments view
  • Select the [... More] button for Freddy's booking
On the Invoice Summary screen, you can see the Payment Status listed. On the Payment Summary information below, you can see listed the individual amounts that have been allocated, and which payment numbers those allocations come from.

Scenario 2 - Overpayment - Payment is Part Allocated

In most scenarios, Workshop Angel will have calculated the amount that is due from your client, taken the amount via a card payment, and that amount paid will be automatically fully allocated to the appropriate invoice. However, in the real world, you will come across other scenarios which you need to manage and monitor with more manual intervention.
Here we will look at overpayment. This can occur in a couple of different scenarios:
  • Where a payment is made via bank transfer or Paypal, and the amount that has been paid is more than the client actually owes.
  • Where you move a client from one activity to another, and the price of the new activity is less than they have already paid.
Let's create an overpayment scenario:
  • In Test Mode, add a booking to our Financial Examples activity for "Olivia Over". Have her choose to pay by Bank Transfer
  • Back in Workshop Angel, go to the Bookings - Payments view for the activity, and if necessary, click on [Refresh Bookings].
  • Click on [+ Add Payment] for Olivia's booking.
  • Add a bank transfer payment for 110, and click on [Create Payment]
You will now see that the payment has a status of "Contains a credit...":
So the correct amount of 100 has been allocated to her invoice, but there is now a credit of 10 that exists within the payment. Olivia has no other invoices with outstanding amounts, and so this credit amount of 10 is in your bank account with her name associated with it.
In the next lesson, we will look in more detail at managing these amounts of credit which your individual clients have with your business.

Scenario 3 - Allocating Overpayment to Another Invoice

You may find some scenarios where one single payment is actually for the payment of two separate invoices. In this situation, you will need to manually intervene to allocate the payment to the second invoice.
We'll take a look at an example of this. Let's imagine that you talk to Olivia about her overpayment, and she says she would like to donate the extra money to your business. How would you account for this in Workshop Angel, given that the system is currently showing she has made an overpayment? The best way to do it would be to create a separate invoice for 10 with a description of "Donation", and then to allocate the spare 10 on her current payment to this invoice.
Here are the steps to do this.
To create the invoice:
  • Go to the Finances - Invoices and Payments area.
  • On the left hand side, select the [+Add Invoice] option.
  • Create an invoice to Olivia Over with a description of "Donation" for an amount of 10.
Once created, this invoice shows the full amount of 10 is outstanding, because no payment has yet been allocated to it. All manual payment allocations occur from within the payment window, not from the invoice window.
To allocate the payment to this invoice:
  • In the payments area on the right hand side of the display, find and open the payment made by Olivia.
  • In the allocations area, there is now an option to allocate the credit of 10 to the Donation invoice
  • Click on [Allocate to This Invoice] in this area.
The payment status is now Fully Allocated.
The remaining 10 of the payment has been allocated to the Donation invoice.

Scenario 4 - Removing or Changing an Allocation

If you have a client with several outstanding invoices, it is possible that Workshop Angel will allocate a manually created payment to the wrong invoice.
In this case you should:
  • Open the Payment
  • Click on [Remove This Allocation] for the incorrect allocation.
You will now be presented with a list of outstanding invoices to allocate the payment to.
  • Click on [Allocate to This Invoice] next to the entry for the invoice you wish to allocate the payment to.
You can do this several times if the payment is to contribute towards multiple invoices, until the payment is fully allocated.

Allocating Credit Notes

We discussed in lesson MF-2 how it is possible to create an invoice with a negative invoiced amount, which is known as a Credit Note. Once created, a credit note needs to be allocated to a Payment so that it is considered fully paid (or credited in this case).
Once you have created the Credit Note, open a Payment from the same client and you will have the option to allocate the Credit Note to the Payment:
To allocate the Credit Note to this payment:
  • Click on [Allocate to This Credit Note]
The Credit Note will now be allocated, creating a credit in the Payment:
The credit amount can now be refunded - all the details of how this works are discussed in the next lesson, MF-5.


We have looked in more detail at how the allocation process works within a payment, and how you can see and manage the way a payment is allocated to one or more invoices.
The next lesson will take a look at the very important topic of how you are best to manage payments which are showing a credit, or overpayment...