This article explains how EOR Early Invoicing works for clients. EOR Early Invoicing is a flexibility we provide clients to help them preserve their capital.
Early Invoicing works by invoicing clients only for the next month's estimated costs, rather than taking an entire deposit. This means that clients do not have to pay any upfront deposit and any deposit paid will be transferred to their Deel balance.
In this article:
How does the Early Invoicing Model Work?
What is Early Invoicing?
Early invoicing is a feature in which we enable the clients to get rid of traditional upfront deposits. Instead of holding deposits for the whole contract tenure, we:
- Charge an estimate early of each month's invoices.
- The client pays this and the money goes into their funds
- When paying the current month's invoices the client can offset funds from the early invoicing balance.
In this way, clients do not have to pay any extra deposit and any deposit already paid by the client is transferred to their Deel Balance.
Clients can enable early invoicing when creating an EOR contract, or clients can request a contract amendment to an active contract at any time to enable early invoicing.
How does the Early Invoicing model work?
When the EOR Early Invoicing feature is enabled for your organization, on the 23rd of each month at 23:59 PST (Pacific Standard Time) following the payroll run for the billing period, we will issue two invoices:
- A regular EOR monthly invoice for the current month ( EOR fees + payroll invoices).
- Previously paid early invoicing prefunding statements’ money can be used to pay for this invoice.
- A Pre-funding Statement invoice for the upcoming month (e.g., for April if issued in March)
- A Pre-Funding Statement is an estimation for the next month's invoice.
- This money will be transferred to the Early Invoicing Balance and can be used for the next cycle's regular EOR invoice.
For the actual month's invoice and next month's EOR funding statement with next month's estimation, the client will have 5 days from the issuing date to make payments.
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When making payments:
- Clients can offset the funds sent for the Pre-funding Statement which is added to the client's Early Invoice balance in their preferred pay-in currency.
Frequently Asked Questions
[ACCORDION]What happens if my payment amount for early invoices is not equal to the amount of the next regular monthly invoice?
If your EOR early invoicing balance exceeds the amount for the next regular monthly invoice, the remaining sum will stay in your Early Invoicing balance for the forthcoming regular invoice cycle. Any excess balance can be utilized for funding the next regular invoice cycles.
Conversely, if your regular invoice amount exceeds the Early Invoice balance, you will be required to pay the difference to cover the total amount of the regular invoice.
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[ACCORDION]If an EOR funding statement is issued on the 23rd, what is the due date for the actual payable invoice?
The due date for the payable invoice is five days from the date of issuance. This provides the client with five days to pay both the EOR funding statement and the actual invoice.
You may incur late payment charges if you do not meet the invoice payment deadline.
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