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