A sales invoice is an essential document, which is issued to the customer as a record for the goods or services provided to them. These days they can either be issued on paper and sent in the post or issued in an electronic form. An invoice is normally issued to the customer after the completion of a service or after the delivery of goods. An invoice typically consists of two copies, one of which is given to the customer and the seller keeps the other copy (copy invoice). Auditing
VAT (Value Added Tax) is a consumption tax levied by the government on most goods and services and is normally calculated as a percentage of sale price charged by the seller to the customer. It is mandatory for a VAT registered supplier to issue a VAT invoice their customers.
A ‘typical VAT invoice’ can be broken down in to three separate sections. The first section should include the following,
- A unique invoice number.
- Business name and address.
- Business VAT registration number.
- Date of sale (will usually become tax-point date of transaction)
- Name of the customer or client.
The second section should contain,
- Name of the goods/services purchased and description where appropriate.
- Quantity purchased.
- Unit price.
- Discount given (if any)
- VAT rate charged
And finally the third section should comprise of,
- Net amount, Vat amount and Gross Amount of the Invoice
- Payment terms/Due date for payment
The backside of an invoice can also be used to detail the ‘terms and conditions’ of the sale and can normally include clauses like ‘goods once sold cannot be returned’ etc. Alternatively, you can use the backside to advertise new products and services, promotions or any other information that may be useful to the seller.