VAT Invoice is one of the most important records that an individual or enterprise should always have. It is a value added on a consumption price and this is an obligatory document which shows what the consumer has paid for the service or taxable goods, it also shows liability that makes them trustworthy. VAT Invoice was made to show or declare accurate details to avoid cheating and smuggling. So, business wise, people would be entitled to have fair trading and convenient transactions. It is totally hassle free since at our current state it is always required by the law in most countries.
Its format should always be followed and has mandatory features since it will show lots of legalities and will be used for further business related cases. Even the placing of the title VAT Invoice or TAX Invoice should always be put in the prominent place. Reviewing each detail is a must to avoid inaccuracy, and must always put the word INVOICE. You can use some of the downloadable formats from the internet and much better if your business or company would provide a unique one. It can be in excel format or PDF.
Your VAT Invoice format should have the following details:
Step 1 Your business’ complete name and address: Every registered business should have this first and foremost before any transactions.
Step 2 Exact date of the issued VAT Invoice: This should be easy to be noticed and probably at the topmost of the document, can be a stamp as well.
Step 3 A unique trace number for the invoice that must be in sequence regarding with previous transactions
For each transaction, there is a corresponding trace number in a chronological order just like some receipts. Even in electronics form let us say your company has a website for these kind of record they should provide a sequential order for it.
Step 4 The recipient’s business number and address: Some of the businesses do not have business numbers but for sure they have a name for it and an exact address.
Step 5 The kind/s of services or product purchased or the description
Step 6 The amount of hours and quantity of each item: Now this should be one of the most recorded and accurate things when making an invoice for example,i.e. IT Services, 40$, 2 hours
Step 7 Net and gross of VAT: Each item can have a discounted value and can be value added so this should be listed as well
Step 8 Payment rates or rates for every purchased item: This is to show everything for a clearer summary of the payment
Step 9 Mode of payment and Payment terms: It is a deal on how you wanted to receive the payment for the goods/services and a basis for the consumer or trader on how they are going to complete the payment if cash basis is cannot be made right away.
Step 10 Signed printed name: Now this is a widely known way of indicating legality in most of the documents
Everything that should be in an invoice must be accurate and true. That is why for most enterprises and businesses it is essential to keep everything recorded. One can include bank accounts for electronic kind of payments (bank to bank). If payment rates and method are not indicated or not filled out, it only means that it will be paid during the 30 day payment period that every VAT registered business knows. VAT invoice should be given to the trader immediately or even within 15 days of the last days of the month that the services/goods is supplied or given.
1. Transparent and straightforward.
There should be no hidden charge that is why each item is recommended to be posted with and without VAT rates.
2. Customer’s Currency.
Now this is quite confusing, but businesses can always make another copy of the invoice issued especially when dealing outside the country, you can make two copies with your currency and two copies of the trader’s currency, with only one tracing number or transaction number. This is to consider the customers.
3. Rates of VAT
Putting the right rate of VAT in your business offered can be a plus to your credibility. It may vary on what type of service/goods is traded. (20%, 5%, 0%)
4. Simple and formal
That is why there are some downloadable formats to use on in case one is wondering on how to make them. Keeping it clean and simple makes it more formal.
5. Easy way of payment mode
For the convenience of the traders an easy way of payment is very useful since it will not consume so much time and can make faster transactions.