Evrenus Fırat Polat · ·
With a handful of invoices, keeping track in your head works fine. Past that, a simple status for each one, even in a basic spreadsheet, turns "did I get paid for that one?" from a memory exercise into a quick lookup.
A status set that covers most businesses
- Draft: created but not yet sent. Numbers and details can still change freely.
- Sent: delivered to the client, payment clock running, nothing overdue yet.
- Paid: payment received and confirmed. Closed.
- Overdue: past the due date with no payment received. This is the status that needs active attention.
- Void: cancelled after being sent, typically replaced by a corrected invoice or a credit note rather than being deleted outright.
Some businesses add Partially Paid for invoices with a deposit or installment already received (see invoice deposits), and Disputed for invoices under active discussion with the client (see invoice disputes). Both are useful if they come up often enough to be worth tracking separately rather than lumping into "Overdue."
What moves an invoice between statuses
Each change should have one clear trigger, so two people reading the list would reach the same answer.
| From | To | Trigger |
|---|---|---|
| Draft | Sent | You email or hand over the invoice |
| Sent | Paid | Money is in your account, not just promised |
| Sent | Overdue | The due date passes with no payment |
| Overdue | Paid | Payment received |
| Sent / Overdue | Partially Paid | A deposit or installment arrives |
| Sent / Overdue | Void | You cancel and replace it |
| Any open status | Disputed | The client raises a question you must resolve |
Mark an invoice Paid only when the money has actually arrived. A client saying "it's been sent" is not payment. Check against your bank record, as described in payment reconciliation.
Worked example: a month of invoices
You have six invoices at the end of the month:
| Invoice | Amount | Status | Note |
|---|---|---|---|
| INV-0101 | $1,200 | Paid | Cleared March 3 |
| INV-0102 | $850 | Sent | Due April 10 |
| INV-0103 | $3,000 | Partially Paid | $1,000 deposit received, $2,000 open |
| INV-0104 | $640 | Overdue | 12 days past due |
| INV-0105 | $2,200 | Disputed | Client questions line 3 |
| INV-0106 | $400 | Draft | Not sent yet |
Open money to collect: $850 + $2,000 + $640 + $2,200 = $5,690. Of that, $2,840 (the overdue and disputed ones) needs action now. The draft is not counted, because it is not yet a claim on the client. A quick filter gives you this view in seconds. Without statuses, you would need to open six documents to learn it.
Why "Void" matters more than it seems
Never delete a sent invoice, even a mistaken one. Its number has already been issued and may already be reflected in your own accounting. Marking it Void (and, if money already changed hands, issuing a credit note against it) keeps your numbering sequence intact and leaves a clear record of what happened, instead of a gap that looks like a missing invoice later. See invoice numbering for how this fits the sequence.
Keep the categories few
The value of a status system comes from scanning it in seconds. Five or six statuses cover nearly every real situation. A longer list costs more in upkeep than it saves in clarity. If you need a seventh or eighth category, two of your existing ones should probably be merged.
Weekly review routine
- Filter for Overdue. Choose the next action for each: reminder, call, or payment plan.
- Filter for Sent with a due date in the next seven days. Send a courtesy reminder if useful.
- Check Disputed items. Is anything waiting on you?
- Compare your Paid list with the bank statement.
- Move any stale Drafts: send them or void them.
For the actions on step 1, use invoice reminder templates and the sequence in overdue invoices.
Common mistakes
- Marking Paid on promise. Wait for the money.
- Leaving Drafts to rot. A draft from three months ago is either a missed sale or a forgotten bill.
- Lumping everything into Overdue. A disputed invoice needs a conversation, not a reminder.
- Deleting instead of voiding. It creates gaps and hides history.
- Status tracked in two places. Pick one system as the truth.
FAQ
Do I need invoicing software for statuses?
No. A spreadsheet with columns for number, client, amount, due date, and status is enough for most small businesses. Software helps once volume grows.
Should "Overdue" change automatically?
If your tool supports it, yes. The status should flip the day after the due date. If you track by hand, check the list each week.
How is Partially Paid different from Sent?
Sent means nothing has been received. Partially Paid means some money arrived, so the outstanding balance is lower than the invoice total. Always record the remaining balance.
Can a Void invoice come back?
No. Issue a new invoice with a new number. The void one stays in your records as history.
Review overdue status weekly, at minimum
The point of tracking status is to make the "needs action" invoices visible without re-checking each one. A quick weekly filter turns invoice follow-up from a task you have to remember into one your own system surfaces for you.