Invoicing for beginners: what an invoice must contain

Getting invoicing right as a beginner is the foundation of orderly finances and good relationships with customers. An invoice must contain the prescribed particulars, otherwise it can cause problems both during an audit and when it comes to payment. Many newcomers underestimate it and make needless mistakes that are easy to avoid. Let us go through what must not be missing from it.

Why the invoice matters

An invoice is a document evidencing the sale of goods or a service and serves as the basis for both accounting and taxes. An incomplete or incorrect invoice can mean late payment, a dispute with a customer or a problem in a tax audit. That is why it pays to do it properly right from the start. A professionally prepared invoice also comes across as trustworthy and builds your business’s good name from the very first deal.

Numbering and keeping your documents in order

Each invoice should have a unique sequential number in a continuous number series without gaps. Clear numbering makes it easier for you to keep track and match payments, and it makes your accountant’s work easier too. Introduce a consistent system right at the start and stick to it throughout the year. That way you will avoid duplicates and needless searching when you need to track down a particular document.

Mandatory particulars of an invoice

For an invoice to be valid, it should contain the basic identification and business details. Typical particulars include:

• the designation of the document and its sequential number,
• the identification details of both the supplier and the customer,
• the date of issue and the date of supply,
• a description and the quantity of the goods or service,
• the price, a tax breakdown where applicable, and the amount payable,
• the due date and payment details.

VAT payers and non-payers

The scope of the details differs depending on whether you are a VAT payer. A VAT payer must state the tax details, the rate and the tax base on the invoice, while a non-payer usually includes a note that they are not a VAT payer. The specific rules and registration thresholds change, so check the current figures and obligations in up-to-date sources.

How to issue an invoice step by step

1. Fill in your identification details and the customer’s details.
2. Assign a sequential number according to your number series.
3. Describe the goods or service supplied and state the price.
4. Set the date of supply, the date of issue and the due date.
5. Check that everything is correct and send the invoice to the customer.

Practical tips for trouble-free payments

To get paid on time, send invoices as soon as possible after delivery and state a reasonable due date and clear payment details. A polite reminder a few days before the due date also helps. Archive and keep records of your invoices so that you have an overview of what has been paid and what is still outstanding. For repeat work, consider advance invoices or payment up front, which reduces the risk of not getting paid for work delivered. Keeping your invoices in order is the basis of healthy cash flow.

When to turn to an accountant

If you are not sure which details you have to state, or you are approaching the VAT registration threshold, consult an accountant. Getting invoicing right as a beginner will save you time and nerves and keep your accounting in order from the very first invoice. It is also worth using an invoicing tool that fills in the mandatory particulars automatically and reduces the risk of errors, so that you can give your customers your full attention.

Related articles: How to set prices for your services and products, How to choose the right legal form for your business, E-shop: obligations and accounting for online sales.

Frequently asked questions

What must an invoice contain?

An invoice should contain a sequential number, the identification details of both the supplier and the customer, the date of issue and of supply, a description of the goods or service, the price and the amount payable, the due date and payment details. A VAT payer also adds the tax details.

As a non-VAT payer, do I have to state anything extra on the invoice?

As a non-VAT payer you usually do not state any tax, but a note is added to the invoice saying that you are not a VAT payer. As the rules change, it is best to check the current requirements or discuss them with an accountant.