Invoice

From Wikipedia, the free encyclopedia

For the Japanese company, see ​Invoice (company)​.

See also ​Voucher​: an invoice is within the ​European union​ primarily

legally defined by the EU VAT directive as an ​accounting​ ​voucher
(to verify tax and VAT reporting) and secondly as a ​Civil law
(common law)​ document.

An ​invoice​, ​bill​ or ​tab​ is a ​commercial​ document issued by a ​seller​ to

a ​buyer​, relating to a sale transaction and indicating the ​products​,
quantities, and agreed ​prices​ for products or ​services​ the seller had
provided the buyer.

Payment terms​ are usually stated on the invoice. These may specify
that the buyer has a maximum number of days in which to pay and is
sometimes offered a discount if paid before the due date. The buyer
could have already paid for the products or services listed on the
invoice.

In the rental industry, an invoice must include a specific reference to

the duration of the time being billed. So in addition to quantity, price,
and discount, the invoice amount is also based on duration. Generally,
each line of a rental invoice will refer to the actual hours, days, weeks,
months, etc., being billed.

From the point of view of a seller, an invoice is a ​sales invoice​. From

the point of view of a buyer, an invoice is a ​purchase invoice​. The
document indicates the buyer and seller, but the term ​invoice​ indicates
money is owed ​or​ owing.

Contents
​ [​hide​]

1​Invoice
1.1​European Union
1.1.1​EU VAT union invoice definition
 1.1.2​EU VAT union receipt (simple
invoice) definition
1.2​Australian Tax Office Tax invoice definition
2​Variations
3​Electronic
3.1​EDIFACT
3.2​Open Application Group Integration Specification
(OAGIS) from OAGi
3.3​UBL
3.4​ISDOC
4​Payment
5​Standardisation
6​Invoice finance
7​See also
8​References
9​External links

Invoice​[​edit​]
Invoice
Anthony Fenlon
8 Killimy Rd
Emo
Co. Laois

Panda Power
2
4
B
a
l
l
y
m
o
u
n
t
R
d
U
p
p
e
r
B
a
l
l
y
m
o
u
n
t
 D
u
b
l
i
n

Invoice No Terms

1 March 5-18 Payout

Description Amount Owed:

1 Dual sale €85.00

1 Electric sale €55.00

1 Electric sale €55.00

Invoice Total €195.00

[1]​[2]
A typical invoice may contain:​

● The word ​invoice​ (or ​tax invoice​);

● A unique reference number (in case of correspondence
about the invoice);
● Date of the invoice;
[3]
● Credit terms;​
● Tax payments, if relevant (e.g., ​GST​ or ​VAT​);
● Name and contact details of the seller;
● Tax or company registration details of seller, if relevant e.g.
ABN​ for Australian businesses or ​VAT number​ for
businesses in the EU;
● Name and contact details of the buyer;
● Date that the goods or service was sent or delivered;
● Purchase order​ number (or similar tracking numbers
requested by the buyer to be mentioned on the invoice);
● Description of the product(s);
● Unit price(s) of the product(s), if relevant;
● Total amount charged (optionally with breakdown of taxes,
if relevant);
● Payment terms (including method of payment, date of
payment, and details about charges for late payment);
In countries where ​wire transfer​ is the preferred method of settling
debts, the printed bill will contain the ​bank account number​ of the
creditor and usually a reference code to be passed along the
transaction identifying the payer.

The US Defense Logistics Agency requires an ​employer identification

[4]
number​ on invoices.​

The European Union requires a ​VAT (value added tax) identification

number​.

In Canada, the registration number for ​GST​ purposes must be

furnished for all supplies over $30 made by a registered supplier in
[5]
order to claim input tax credits.​

Recommendations about invoices used in international trade are also

provided by the ​UNECE​ Committee on Trade, which involves a more
detailed description of the logistics aspect of merchandise and
therefore may be convenient for international logistics and customs

procedures.​[6]

European Union​[​edit​]

EU VAT union invoice definition​[​edit​]

Within the ​European Union value added tax​ directive,​[7]​ article 226 is a

concise definition of invoices within the union member states.

Without prejudice to the particular provisions laid down in this

Directive, only the following details are required for VAT purposes on
invoices issued pursuant to Articles 220 and 221:

● (1) the date of issue;

● (2) a sequential number, based on one or more series,
which uniquely identifies the invoice;
● (3) the ​VAT identification number​ referred to in Article 214
under which the taxable person supplied the goods or
services;
● (4) the customer's VAT identification number, as referred to
in Article 214, under which the customer received a supply
of goods or services in respect of which he is liable for
 payment of VAT, or received a supply of goods as referred
to in Article 138;
● (5) the full name and address of the taxable person and of
the customer;
● (6) the quantity and nature of the goods supplied or the
extent and nature of the services rendered;
● (7) the date on which the supply of goods or services was
made or completed or the date on which the ​payment​ on
account referred to in points (4) and (5) of Article 220 was
made, in so far as that date can be determined and differs
from the date of issue of the invoice;
● (7a) where the VAT becomes chargeable at the time when
the payment is received in accordance with Article 66(b)
and the right of deduction arises at the time the deductible
tax becomes chargeable, the mention ‘​cash accounting​’;
● (8) the taxable amount per rate or exemption, the unit price
exclusive of VAT and any ​discounts​ or ​rebates​ if they are
not included in the unit price;
● (9) the VAT rate applied;
● (10) the VAT amount payable, except where a special
arrangement is applied under which, in accordance with
this Directive, such a detail is excluded;
● (10a) where the customer receiving the supply issues the
invoice (instead of the supplier) the mention ‘self-billing’;
● (11) in the case of an ​exemption​, reference to the
applicable provision of this Directive, or to the
corresponding national provision, or any other reference
indicating that the supply of goods or services is exempt;
● (11a) where the customer is liable for the payment of the
VAT, the mention ‘reverse charge’;
● (12) in the case of the supply of a new ​means of transport
made in accordance with the conditions specified in Article
138(1) and (2)(a), the characteristics as identified in point
(b) of Article 2(2);
● (13) where the margin scheme for ​travel agents​ is applied,
the mention ‘margin scheme — ​travel agents​’;
● (14) where one of the special arrangements applicable to
second-hand goods​, ​works of art​, collectors’ items and
antiques is applied, the mention ‘margin scheme —
second-hand goods’; ‘margin scheme — works of art’ or
‘margin scheme — collector’s items and antiques’
respectively;
● (15) where the person liable for payment of VAT is a tax
representative for the purposes of Article 204, the (​VAT
identification number​, referred to in Article 214, of that tax
representative, together with his full name and address.

EU VAT union receipt (simple invoice) definition​[​edit​]

 [8]​
Within the ​European Union value added tax​ directive,​ article 226b is

a concise definition of ​receipts​ within the union member states.

As regards simplified invoices issued pursuant to Article 220a and

Article 221(1) and (2), Member States shall require at least the
following details:

● (a) the date of issue;

● (b) identification of the taxable person supplying the goods
or services (​VAT identification number​);
● (c) identification of the type of goods or services supplied;
● (d) the VAT amount payable or the information needed to
calculate it;
● (e) where the invoice issued is a document or message
treated as an invoice pursuant to Article 219, specific and
unambiguous reference to that initial invoice and the
specific details which are being amended.
They may not require details on invoices other than those referred to in
Articles 226, 227 and 230.

Australian Tax Office Tax invoice

definition​[​edit​]
Details about the ​Australian Tax Office​ (ATO) requirements for a tax
[9]​[10]
invoice can be found on their website.​

For all GST purposes, a seller must issue a tax invoice to the buyer
regardless the sale being in cash or credit. Hence, a tax invoice in
Australia serves as an invoice as well as a receipt in the conventional
sense. The words 'paid' or 'payable' will differentiate meaning. The tax
invoice must contain seven facts as per the GST Tax Law.

Variations​[​edit​]
There are different types of invoices:

● Pro forma​ invoice — In ​foreign trade​, a ​pro forma​ invoice

is a document that states a commitment from the seller to
provide specified goods to the buyer at specific prices. It is
often used to declare value for ​customs​. It is not an actual
invoice, and thus the seller does not record a ​pro forma
invoice as an ​account receivable​ and the buyer does not
 record a ​pro forma​ invoice as an ​account payable​. A ​pro
forma​ invoice is not issued by the seller until the seller and
buyer have agreed to the terms of the ​order​. In a few
cases, a ​pro forma​ invoice is issued to request advance
payments from the buyer, either to allow production to start
or for security of the goods produced.
● Credit memo​ - If the buyer returns the goods, the seller
usually issues a credit memo for the same or lower amount
than the invoice, and then refunds the money to the buyer,
or the buyer can apply that credit memo to another invoice.
● Commercial invoice​ - a ​customs declaration​ form used in
international trade that describes the parties involved in the
shipping transaction, the goods being transported, and the
[11]​
value of the goods.​ It is the primary document used by
customs, and must meet specific customs requirements,
such as the ​Harmonized System​ number and the country of
manufacture. It is used to calculate ​tariffs​.
● Debit memo​ - When a company fails to pay or short-pays
an invoice, it is common practice to issue a ​debit memo​ for
the ​balance​ and any late fees owed. In function, debit
memos are identical to invoices.
● Self-billing invoice​ - A ​self billing invoice​ is when the
buyer issues the invoice to himself (e.g. according to the
consumption levels he is taking out of a ​vendor-managed
[12]​
inventory​ stock).​ The buyer (i.e. the issuer) should treat
the invoice as an account payable and the seller should
treat it as an account receivable. If there is tax on the sale,
e.g. VAT or GST, then buyer and seller may need to adjust
[13]
their tax accounts in accordance with tax legislation.​
● Evaluated receipt settlement (ERS)​ - ERS is a process of
paying for goods and services from a ​packing slip​ rather
than from a separate invoice document. The payee uses
data in the packing slip to apply for the payments. "In an
ERS transaction, the supplier ships goods based upon an
Advance Shipping Notice (ASN), and the purchaser, upon
receipt​, confirms the existence of a corresponding
purchase order or contract, verifies the identity and quantity
[14]
of the goods, and then pays the supplier."​
● Timesheet​ - Invoices for hourly services issued by
businesses such as ​lawyers​ and ​consultants​ often pull data
from a ​timesheet​. A timesheet invoice may also be
generated by ​Operated equipment rental companies​ where
the invoice will be a combination of timesheet based
charges and equipment rental charges.
● Statement​ - A periodic customer statement includes
opening balance, invoices, payments, credit memos, debit
memos, and ending balance for the customer's account
 during a specified period. A monthly statement can be used
as a summary invoice to request a single payment for
accrued monthly charges.
● Progress billing​ used to obtain partial payment on
extended contracts, particularly in the construction industry
(see ​Schedule of values​)
● Collective Invoicing​ is also known as monthly invoicing in
Japan​. Japanese businesses tend to have many orders
with small amounts because of the outsourcing system
(​Keiretsu​), or of demands for less inventory control
(​Kanban​). To save the administration work, invoicing is
normally processed on monthly basis.
● Continuation or Recurring Invoicing​ is standard within
the equipment rental industry, including tool rental. A
recurring invoice is one generated on a cyclical basis
during the lifetime of a rental contract. For example, if you
rent an excavator from 1 January to 15 April, on a calendar
monthly arrears billing cycle, you would expect to receive
an invoice at the end of January, another at the end of
February, another at the end of March and a final Off-rent
invoice would be generated at the point when the asset is
returned. The same principle would be adopted if you were
invoiced in advance, or if you were invoiced on a specific
day of the month.
● Electronic Invoicing​ is not necessarily the same as EDI
invoicing. Electronic invoicing in its widest sense embraces
EDI as well as XML invoice messages as well as other
formats such as pdf. Historically, other formats such as pdf
were not included in the wider definition of an electronic
invoice because they were not machine readable and the
process benefits of an electronic message could not be
achieved. However, as data extraction techniques have
evolved and as environmental concerns have begun to
dominate the business case for the implementation of
electronic invoicing, other formats are now incorporated
into the wider definition.

Electronic​[​edit​]
Some invoices are no longer paper-based, but rather transmitted
electronically over the Internet. It is still common for electronic
remittance or invoicing to be printed in order to maintain paper records.
Standards for electronic invoicing vary widely from country to country.
Electronic Data Interchange​ (EDI) standards such as the United
Nation's ​EDIFACT​standard include message encoding guidelines for
electronic invoices. The ​EDIFACT​ is followed up in the ​UN/CEFACT
ebXML​ syntax cross industry invoice.

EDIFACT​[​edit​]
The United Nations standard for electronic invoices ("INVOIC")
includes standard codes for transmitting header information (common
to the entire invoice) and codes for transmitting details for each of the
line items (products or services). The "INVOIC" standard can also be
[15]​
used to transmit credit and debit memos.​ The "IFTMCS" standard is

[16]
used to transmit freight invoices.​

In the European Union legislation was passed in 2010 in the form of

directive 2010/45/EU to facilitate the growth of Electronic Invoicing
across all its member states. This legislation caters for varying VAT
and inter-country invoicing requirements within the EU, in addition to
legislating for the authenticity and integrity of invoices being sent
electronically. It is estimated that in 2011 alone roughly 5 million EU
[17]
businesses will have sent Electronic Invoices.​

Open Application Group Integration

Specification (OAGIS) from OAGi​[​edit​]
The ​XML​ message format for electronic invoices has been used since
the inception of XML in 1998. Open Application Group Integration
Specification (OAGIS) has included an invoice since 2001. ​OAGi
(Open Applications Group)​ has a working relationship with
UN/CEFACT where OAGi and its members participate in defining
many of the Technology and Methodology specifications. OAGi also
includes support for these Technology and Methodology specifications
within OAGIS.

UBL​[​edit​]
The ​XML​ message format for electronic invoices has been used in
recent years. There are two standards currently being developed. One
is the cross industry invoice under development by the United Nations
standards body ​UN/CEFACT​ and the other is ​UBL (Universal Business
Language)​ which is issued by ​OASIS (Organization for the
Advancement of Structured Information Standards)​. Implementations
of invoices based on UBL are common, most importantly in the public
sector in ​Denmark​ as it was the first country where UBL is mandated
by law for all the invoices of the public sector. Further implementations
are underway in the Scandinavian countries as result of the ​NES
(North European Subset) project​. Implementations are also underway
[18]​
in ​Italy​, ​Spain​, the ​Netherlands​ (UBL 2.0)​ and with the ​European

Commission​ itself.

The NES work has been transferred to ​CEN (European Committee for
Standardization)​, (the standards body of the European Union)
workshop CEN/BII, for public procurement in Europe. The result of that
work is a pre-condition for PEPPOL, pan European pilots for public
procurement, financed by the European Commission. There UBL
procurement documents will be implemented in cross-border pilots
between European countries.

Agreement has been made between UBL and UN/CEFACT for

convergence of the two XML messages standards with the objective of
merging the two standards into one before end of 2009 including the
provision of an upgrade path for implementations started in either
standard.

ISDOC​[​edit​]
ISDOC​ is a standard that was developed in the Czech Republic as a
universal format for electronic invoices. On 16 October 2008, 14
companies and the Czech government signed a declaration to use this
format within one year in their products.

Payment​[​edit​]
Organizations purchasing goods and services usually have a process
in place for approving payment of invoices based on an employee's
confirmation that the goods or services have been
[19]​[20]​[21]​[22]
received.​

Typically, when paying an invoice, a ​remittance advice​ will be sent to

the supplier to inform them their invoice has been paid.

Standardisation​[​edit​]
Invoices are different from ​receipts​. Both invoices and receipts are
ways of tracking purchases of goods and services. In general the
content of the invoices can be similar to that of receipts including
tracking the amount of the sale, calculating sales tax owed and
[23]​
calculating any discounts applied to the purchase.​ Invoices differ

from receipts in that invoices serve to notify customers of payments

owed, whereas receipts serve as proof of completed payment.

Invoice finance​[​edit​]
Invoice finance is effectively a line of credit for a business that is
secured on the business's portfolio of invoices.

There are several benefits in terms of choosing invoice financing for

your business:

● Lower cost
● Flexibility
[24]
● Confidentiality​

See also​[​edit​]
● Australian Business Number
● Bill of lading
● Cash collection
● Commercial invoice
● Document automation
● Dunning
● List of finance topics
● Order (business)
● Order fulfillment
● Receipt
● Category:Financial regulation
References​[​edit​]
● Jump up^​ Invoice illustration adapted from Meigs and Meigs
Financial Accounting​ 4th Ed. (McGraw-Hill, 1970), p.190 ​ISBN
0-07-041534-X
● Jump up^​ Woodford, William; Wilson, Valerie; Freeman,
Suellen; Freeman, John (2008). ​Accounting: A Practical
Approach​ (2 ed.). P​ earson Education​. pp. 4–10. ​ISBN
978-0-409-32357-3​.
● Jump up^​ ​"Definition of credit terms"​. factoringglossary.org.
● Jump up^​ ​US Defense Logistics Agency - Required
information in invoices​ ​Archived​ 10 July 2007 at the ​Wayback
Machine​.
● Jump up^​ ​Input Tax Credit Information (GST/HST)
Regulations, SOR/91-45​, at s. 3(b)(i)
● Jump up^​ ​Recommendation No. 06: Aligned Invoice Layout
Key for International Trade (UN/CEFACT; 2000; 7 pages) ID:
ECE/TRADE/148; Topic: Trade Facilitation and e-Business
● Jump up^​ ​Council Directive 2006/112/EC of 28 November
2006 on the common system of value added tax
● Jump up^​ ​Council Directive 2006/112/EC of 28 November
2006 on the common system of value added tax
● Jump up^​ Requirements of tax invoices
https://www.ato.gov.au/Business/GST/Issuing-tax-invoices/
● Jump up^​ How to set out tax invoices and invoices ​"Archived
copy"​. Archived from ​the original​on 9 February 2015.
Retrieved 18 January 2015.
● Jump up^​ ​DHL | Global | Customs Paperwork​ ​Archived​ 17
April 2015 at the ​Wayback Machine​.
● Jump up^​ Self-billing, ControlPay,
(​https://www.controlpay.com/services/freight-audit-solutions​)
● Jump up^​ HMRC. ​"Self-billing and VAT"​.
● Jump up^​ ​SCM | What is Evaluated Receipt Settlement?
● Jump up^​ ​EDIFACTORY - The EDIFACT resource
● Jump up^​ ​EDIFACTORY - The EDIFACT resource
● Jump up^​ ​The European Electronic Invoicing Experts
Archived​ 11 January 2012 at the ​Wayback Machine​.
● Jump up^​ ​"Elektronisch factureren"​ (in Dutch).
http://www.rijksoverheid.nl​. Archived from ​the original​ on 22
November 2011. Retrieved 5 January 2012. ​External link in
|publisher=​(h ​ elp​)
● Jump up^​ ​Michigan state Bureau of Transportation Invoice
processing
● Jump up^​ ​US Department of the Navy Commercial Invoice
Payments History System​ ​Archived​3 July 2007 at the
Wayback Machine​.
● Jump up^​ ​Commercial Contracting Guidelines - US Defense
Contract Management Agency​Archived​ 26 June 2007 at the
Wayback Machine​.
● Jump up^​ ​US Office of Federal Procurement Policy - Best
Practices for Contract Administration​Archived​ 12 June 2007 at
the ​Wayback Machine​.
 ● Jump up^​ ​"WorkingPoint Help"​. Workingpoint.com. Archived
from ​the original​ on 19 August 2013. Retrieved 24 May 2013.
● Jump up^​ ​Waddle

External links​[​edit​]
W
i
k
i
m
e
d
i
a
C
o
m
m
o
n
s
h
a
s
m
e
d
i
a
r
e
l
a
t
e
d
t
o
I
n
v
o
i
c
e
s
 ● COUNCIL DIRECTIVE 2006/112/EC of 28 November 2006
on the common system of value added tax (merge revision
version of 1 july 2013)

Categories​:
 ● Accounting source documents
● Business terms

Navigation menu
Not logged in
Talk
Contributions
Create account
Log in
Article

Talk

Read

Edit

View history

Search
● Main page
● Contents

● Featured content

● Current events

● Random article

● Donate to Wikipedia

● Wikipedia store

Interaction
● Help

● About Wikipedia

● Community portal
● Recent changes

● Contact page

Tools
● What links here

● Related changes

● Upload file

● Special pages

● Permanent link

● Page information
 ● Wikidata item

● Cite this page

Print/export
● Create a book

● Download as PDF

● Printable version

In other projects
● Wikimedia Commons

Languages
● ‫اﻟﻌﺮﺑﯿﺔ‬
● Deutsch

● Español

● Français

● Bahasa Indonesia

● Bahasa Melayu

● Português

● Русский

● 中文
33 more
Edit links

This page was last edited on 21 March 2018, at 15:30.

Text is available under the ​Creative Commons Attribution-ShareAlike License​;

additional terms may apply. By using this site, you agree to the ​Terms of Use
and ​Privacy Policy​. Wikipedia® is a registered trademark of the ​Wikimedia
Foundation, Inc.​, a non-profit organization.

Privacy policy

About Wikipedia

Disclaimers

Contact Wikipedia

Developers

Cookie statement
Mobile view

Enable previews