Invoices record agreements in a document. It is an agreement between:
- a supplier, who creates the invoice.
- a customer, who receives the invoice.
Because invoices are official, legally binding agreements, an invoice gives the supplier an obligation to deliver and an obligation to pay the customer. There is also a lot written in the law about invoices. It is therefore very important to follow all the 'rules' when working with invoices.
Purchase and sales invoices
There are two types of invoices in your administration:
- Purchase Invoices. These are invoices your company receives from suppliers.
- Sales Invoices. These are invoices that your company sends to customers.
Impact of invoices
Because invoices are agreements, agreements that must be kept, accounting must assume that delivery and payment are guaranteed. You notice this immediately when you have made a sales invoice for your customer, or when you have received a purchase invoice from your supplier. Because you will notice that the VAT is immediately included in your next tax declaration. Even if the invoice has not yet been paid or has been paid in part. This clearly shows the impact of an invoice.
Because it's so official, you also can't just create, change or throw away an invoice. There are rules for that. For this reason, there are terms such as credit invoices, doubtful debts and bad debts. You will read more about this in a moment.
Invoice system and cash system
- Invoice system: changes in your accounting records are recorded based on the invoice date, even if payment has not yet been made.
- Cash system: changes in your accounting records are recorded based on when the money is received or paid.
In the Netherlands, the tax authorities ask almost every entrepreneur to work with the invoice system. This means that for the supply of goods and services an invoice must always be made. The invoice date determines the period in which you pay the VAT on this invoice.
Invoice date and delivery date
As the impact of invoices above showed, the invoice date determines when you have to declare the VAT. But apart from that, you may not have to pay the profit tax until another time. This is because it depends on the delivery date or delivery period.
The delivery may be the same as the invoice date, or it may be different from the invoice date. The delivery is the date you actually delivered the goods, or the period in which you provided the services. The delivery then determines the date or period in which the revenue of the invoice counts for your profit tax.
Credit invoices
Both purchase and sales invoices have two variants: the normal invoice and the credit invoice. This is also sometimes called a credit note, or very succinctly "credit". But it can be a sales credit invoice or a purchase credit invoice, depending on whether you received it or made it yourself.
Once an invoice has been made, it may no longer be changed. Do you and your customer agree that something has to be changed in the agreement between you? Then you correct the original invoice with a credit invoice. You can read here how this works.
Doubtful debts
If you get the feeling that something is not quite right, then you perform these steps to bring it to a successful conclusion.
Bad debts
Is it clear that a customer is not going to pay an invoice? Then pay close attention to the rules in this situation, so that your bookkeeping remains accurate.
Overpaid invoices
Did your customer pay more than was necessary? No problem, read here how you can solve this.
Underpaid invoices
If your customer has paid just a little less than the grand total of your invoice, but you think it's fine, then read here how to solve this quickly in your bookkeeping.
Locked sales invoices
To help you, your Daxto assistant will try to prevent you from accidentally changing a sales invoice after you have created it. Apart from the financial lock date that you use to lock a period in your accounting, sales invoices are locked immediately after they are created. Why that is and how it works can be read here.