Contents
- What is an invoice?
- Who should issue an invoice?
- Types and formats of invoices
- Example of filling out an invoice
- Common errors when issuing invoices
What is an invoice?
An invoice is an accounting document that serves as proof of receipt of goods by the buyer. It is an important tool in business and plays a key role in financial transactions between the parties involved. For the buyer, this document is necessary to claim a deduction for value-added tax (VAT), while the seller uses it to determine the amount of VAT payable to the state budget.
The invoice contains information about the parties involved in the transaction, including details about the buyer and seller, a description of the goods or services, their cost, as well as the amount of VAT and other key points. All information provided must be current and correspond to data from other documents related to the transaction. It is important to note that the form of the invoice must comply with the latest requirements set by law.
Who should issue an invoice?
When an entrepreneur registers a new legal entity or obtains the status of an individual entrepreneur, they need to choose a tax system under which they will make payments. The state offers various options, such as the general taxation system, simplified system, patent system, and unified agricultural tax. The choice of system depends on the legal status of the business and the amount of income for the year.
Most of these systems include VAT, which is a value-added tax. All companies and individual entrepreneurs who are required to pay VAT must issue invoices. VAT is paid based on the difference between the price of the goods or services and their cost price. The tax is paid to the budget by deducting the amount of VAT paid to suppliers from the total tax liability.
The obligation to issue invoices remains with all companies, except in cases where they sell goods or services exempt from taxation. The list of such goods and services is limited and specified in Article 149 of the Tax Code of Russia.
Types and formats of invoices
There are four main types of invoices: shipping, advance, corrective, and amended. The supplier is required to choose the appropriate type of document depending on the specific situation. For example, an advance invoice is issued if payment was received before the shipment of goods, while a shipping invoice is issued afterward. If errors are found in the issued invoice, a corrective or amended document must be prepared.
For all types, except for corrective, the same template is used. The corrective document has a separate template. Legislation allows invoices to be issued in both paper and electronic form. Typically, the preparation of this documentation is handled by the company's accounting department. When creating a paper invoice, two copies must be made, which are signed by the chief accountant and the company director.
After signing, one copy is handed over to the buyer, while the other remains with the seller. Both parties must record the issuance of the document in their sales and purchase books.
Example of filling out an invoice
The issuance of an invoice can be done using electronic document management (EDM). These are specialized programs managed by operator companies approved by the Federal Tax Service (FTS). Connection to EDM is possible at any time after the registration of a legal entity or individual entrepreneur.
The electronic document management process includes several stages: the initiator creates the invoice, signs it with an electronic signature, and sends it to the buyer through the EDM program. The buyer receives the document, checks it, and if everything is in order, signs it as well. If not, they can return the document with reasons specified. After the invoice is agreed upon, the EDM program adds it to the purchase and sales books.
Common errors when issuing invoices
There are common errors that can lead to a denial of VAT deductions. These include incorrect data that prevent the FTS from identifying the parties involved in the transaction or correctly determining the name and cost of the goods. The most frequent errors include:
- Outdated buyer data, such as an incorrect address.
- Using prices from old versions of contracts or agreements.
- Incorrect choice of tax rate, such as 20% instead of 10%.
- Discrepancy in the name of the goods or services with other documents.
- Incorrect currency code.
Accountants must carefully check all details against current documents, as errors can lead to a denial of tax deductions. If the buyer receives an incorrect invoice, they should immediately contact the seller to correct the errors.