Sales Invoicing

Update 13 Dec 2021

Major changes happening in this Coda document which will soon be retired

This page has been copied to the Handbook (Bookkeeping)

Is the customer a business or an individual person?

You must determine whether the customer is a fellow business or an end consumer. This is very important, because it determines whether or not you charge VAT at all.

You should always ask the customer for their VAT registration number. Every business must have a VAT number. If the customer doesn’t have one, you can assume it’s a B2C sale.

If the customer is a business (B2B), collect their VAT registration number and confirm that the business is valid. Why? Because, sorry to say, some customers might pretend they are a business just to avoid paying the tax! So the best practice is to double-check their number with this

validation tool from the European Commission⁠

Confirm the customer’s location

This determines how much VAT you charge.

You must collect two pieces of evidence that confirm the location. This evidence could be:

The billing address

Location of the customer’s bank

Country which issued the credit card

The IP address location of the buyer’s device

Country of the SIM card (in cases where the purchase was made on a mobile device)

What is a valid VAT invoice

Your business’ name and address

Your business’ VAT number (if you have one)

Invoice date

Invoice sequencing number

Buyer’s name and address

Buyer’s VAT number. If you’re using the reverse charge mechanism, include the text “EU VAT reverse charged”

Rate of VAT applied

Amount of VAT added

Final amount after VAT is added

What other information should the invoice have

Billing period (Start Date and End Date)

Payment method (credit card, bank transfer)

Systems

How is the information flow between systems?

Payment system to accounting system

CRM to accounting system

How do we handle bank reconciliations (ie - matching sales invoices with cash receipts)

How do we deal with failed payments?

Designing a system to raise sales invoices - what systems

Importing invoices

Posting manual journals

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