Companies and the self-employed have to invoice their customers in order to receive the money for the services they have provided or for the goods delivered. These invoices are called outgoing invoices because they leave the company and are sent to customers. Special requirements apply to these outgoing invoices. They are the basis for the dunning process. The outgoing invoices must contain certain information so that they are legally binding.
Definition of the outgoing invoice
According to topbbacolleges, an outgoing invoice is an invoice that is sent out of the company and goes to a customer. Self-employed, freelancers and companies create outgoing invoices after the customer has received the goods or used the service. If the customer has not yet received the goods or services or has not received them in full, companies and the self-employed can also write an invoice in some cases. The company or the self-employed then prepayment with the outgoing invoice. By sending outgoing invoices, companies as well as self-employed and freelancers, who in this case also count as companies, can generate their income. The companies make a claim with the outgoing invoice; the customer settles the outstanding claim by paying the outgoing invoice. The outgoing invoice is part of the accounting, it is recorded in the outgoing invoice journal. Outgoing invoices are recorded as accounts receivable or receivable in the balance sheet.
What belongs in an outgoing invoice
Companies that issue an outgoing invoice must pay attention to the content so that the outgoing invoice becomes legally binding. The following mandatory information must be included in every outgoing invoice :
- Name and address of the customer
- Full name and address of the recipient of the service
- Name and address of the biller
- Full name and address of the supplying company
- Date of invoice
- Date on which the invoice was issued
- bill number
- Consecutive invoice number, the biller is free to set it up, a combination of numbers and letters is permitted. Note: Consecutive invoice numbers are only required from 250 euros.
- Description of the goods or services that the customer has received
- Concrete description of the quantity and type of goods / services provided, delivered or sold. When in doubt, it is better to have one detail too many than one too little.
- Invoice amount, broken down into net amount, VAT and gross amount
- Fee for the service rendered and the tax amount due on this as well as reference to tax exemption.
- Tax number / VAT identification number
- Tax number or VAT ID no. of the providing company.
- Payment term
- Time of the service to be provided by the customer
- Biller’s bank details.
- Information on the biller’s bank details
Here for you again all together in one image.
An outgoing invoice can contain further information in addition to the above information. If several goods have been delivered, the outgoing invoice must contain the exact description of the goods, the number of items, the unit price and the total price. For tax reasons, the invoice number must be consecutive and each invoice number may only be issued once. If a company has several customers, each customer receives a customer number and the customer number is listed on the invoice. A company often grants the customer a discount if he pays the invoice early, before the payment deadline has expired. In this case, it must be stated in the invoice until when it can be paid with a discount and what percentage of the discount amount is. The discount amount can also be listed on the invoice.
The advance invoice as a special form of the outgoing invoice
The advance invoice or invoice on account is a special form of the outgoing invoice. It is mainly created for large projects. In construction companies, for example, they are often created when a construction project has been completed to a certain stage. The down payment invoice must contain the project name and the down payment amount as the net invoice amount. In addition, it must be specified which advance invoice is involved, for example 1st, 2nd or 3rd advance invoice. If partial invoices have already been issued for this project, the total amount for the service that has already been provided must be specified in the partial invoice. It must also be stated what amount the customer has already paid and what amount the customer must pay with the relevant partial invoice. Final invoice will be issued, which will be marked as such. In this, on the one hand, the total value for the project is specified as the invoice amount and, on the other hand, which discounts the customer has already paid. The partial invoice and the final invoice must contain all information that is also required for other outgoing invoices.
The outgoing invoice in accounting
In accounting, the outgoing invoice serves as the basis for monitoring payment transactions. The outgoing invoice is recorded in the journal. Likewise, when the payment of the invoice is received. If it is not paid on time, it forms the basis for the dunning process. The company’s sales are determined on the basis of all outgoing invoices.