> ## Documentation Index
> Fetch the complete documentation index at: https://docs2.zenskar.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Life cycle of an invoice

The **life cycle of an invoice** refers to the stages that an invoice goes through from its creation to final payment. It includes several steps, from the initial agreement between buyer and seller to the closure of the transaction once payment is made. This guide helps you understand the typical life cycle of an invoice in Zenskar.

## Life cycle of an invoice

The following is a **state diagram** of an invoice in Zenskar.

> 📚 What is a state diagram?
>
> A *state diagram*, also known as a *state machine diagram* or *state chart*, is a visual representation used to model the various states an object or system can be in and how it transitions between those states.
>
> In this document, the object we are dealing with is an invoice.

```mermaid theme={null}
%%{
  init: {
    'theme': 'dark',
    'themeVariables': {
      'darkMode': 'true'
    }
  }
}%%

stateDiagram-v2
  classDef voidEvent fill:#f00,color:white,font-weight:bold,stroke-width:2px,stroke:yellow
  classDef deleteEvent fill:#f00,color:white,stroke-width:2px,stroke:red
  classDef paidEvent fill:green,color:white,stroke-width:2px,stroke:green
  classDef partiallyPaidEvent fill:#90EE90,color:black,stroke-width:2px,stroke:#90EE90
  classDef approvedEvent fill:yellow,color:black,stroke-width:2px,stroke:yellow
  classDef draftBlock fill:black,color:white,stroke-width:2px,stroke:black

  [*] --> Draft:::draftBlock
  Draft --> Approved: Draft approved
  Draft --> Deleted:::deleteEvent: Draft deleted
  note right of Deleted : Only a **draft** invoice can be deleted. Once an invoice moves to the **approved** state, it becomes a **formal record of the transaction**. As a result, it cannot be deleted.

  Approved --> Paid:::paidEvent: Customer makes full payment
  Approved:::approvedEvent --> PartiallyPaid:::partiallyPaidEvent: Customer makes partial payment
  PartiallyPaid --> Paid:::paidEvent: Customer makes full payment
  Paid --> [*]:Accounting
  Approved --> Void:::voidEvent: Credit notes issued
  Paid --> Void:::voidEvent: Credit notes issued
  PartiallyPaid --> Void:::voidEvent: Credit notes issued
  Void --> [*]:Accounting
  note left of Void : If circumstances require a full refund to the customer, credit notes equal to the refund amount must be issued. As a result, an **approved**, **partially paid**, or **paid** invoice will move to the **void** state. Partial refunds also require credit notes, but the state of the invoice will remain unchanged.
```

<br />

<Accordion title="Draft" icon="fa-pen-to-square">
  📚 A newly generated invoice is called a **draft** invoice: a preliminary version that is open to modifications.
</Accordion>

<Accordion title="Approved" icon="fa-file-invoice">
  📚 Once you have reviewed the *draft* invoice and confirmed that the details are accurate, the *draft* invoice can be **approved**.  \* Once you have verified all the details of a draft invoice, it can be **approved** by clicking on the **Approve invoice** button.

  > 🚧 Note
  >
  > Once a *draft* invoice is *approved*, it becomes a formal record of a transaction between you and your customer. Relevant accounting entries are created. Therefore, unlike a draft invoice, an approved invoice cannot be edited. Once approved, any adjustments to the invoice can be made only by issuing credit notes. Therefore, it is important to scrutinize the draft invoice before approving it.
</Accordion>

<Accordion title="Partially paid" icon="fa-file-invoice-dollar">
  📚 When customers make a partial payment on an *approved* invoice, it becomes a **partially paid** invoice.
</Accordion>

<Accordion title="Paid" icon="fa-file-invoice-dollar">
  📚 When customers make a full payment on an *approved* invoice, it becomes a **paid** invoice.

  An *approved* invoice can become a *paid* invoice in the following ways:

  * Customer can make multiple partial payments amounting to the invoice due amount.
  * Customer can make one payment amounting to the invoice due amount.
</Accordion>

<Accordion title="Void" icon="fa-ban">
  📚 If circumstances require a full refund to the customer, credit notes equal to the refund amount must be issued. As a result, an *approved*, *partially paid*, or *paid* invoice will become **void**.

  * If an invoice has only been approved and no payments were made by the customer, relevant accounting adjustments are made.
  * If an invoice is already paid, then a refund is issued to the customer's source payment method.
</Accordion>