Invoice numbering in the Netherlands: common mistakes and options
31.03.2022We receive a lot of questions regarding invoice numbering. For example, these:
- Why does the IRS care how I number invoices? Does numbering really pose real validation problems?
In short, the missing number is the undisplayed profit. That is why it is important to know how to correctly number invoices.
Common mistakes
Very often, a person, not knowing which number to put, puts a number associated with a date, or comes up with other ways - simply because he does not want to issue invoice number one. He is embarrassed that the client will know - he is the first.
And it happens that there is no numbering at all or it coincides with the current date. Or the numbering is as follows: “January 1, January 2, January 3”, and then “February 1, February 2, February 3”.
Such numbering will be perceived as incorrect. This can trigger an audit whereby the IRS may very well be looking at all receipts on all of your accounts, including all of your private and partner accounts, to see if your real income is real. That is, it will be calculated not by invoices, but by what you actually have.
Invoice numbering options
How to make sure that there are no questions from the tax? It is important to know: the invoice number must contain some piece in which there is an ordinal (ascending) numbering. The numbers are not to be missed.
If you want to write, suppose "customerA' and 'clientB", you can do it. But at the same time, some piece of the texture (at the beginning, at the end or in the middle) should start from No. 1 and on. The order principle must be preserved. There should be no missing numbers. At the same time, the invoice may contain dashes, dots, slashes or letters that mean something for you (client, direction).
If, nevertheless, you started your work with the 80th issue, then be prepared for the fact that the tax office will ask: where, in fact, are all your previous seventy-nine invoices? If this is your case, then you need to be prepared to explain that you did not want to tell the client that he was your first. Such an explanation can be accepted.
Read more about invoicing in general. here.
And what to do when the new year begins?
Do I need to start numbering from one or can I continue the one you led last year?
By law, you can start a new numbering from the new year. But then the textures of the old year should be visually different from the new year.
For example. You had the last invoice 2021-30, and in the new year 2022-01. Or you had 65-21, and now 1-22. You can also take the last digit of the year. For example, you had invoice number 103 there, where 1 is the designation of 2021. And now you will have 201, where 2 is 2022.
Remember that you must be able to explain the logic behind invoice numbering.
What are the advantages of the new numbering from the new year?
Closing the old year, many find that they forgot to invoice some amount. If the numbering is continuous, then you will not have a margin for numbers. Accordingly, you will not be able to correct the situation, and you will have to issue an invoice in the new year. And this will affect your taxes. In the opposite situation, you will have room to maneuver.
The IRS will look for the missing number
It happens that the numbering order is confused due to the fact that invoices are issued by several people at the same time. Or, for example, the client did not pay the invoice, and the entrepreneur decided to “cancel” it.
This cannot be done. You need to do it differently, namely, write out a credit note (invoice with a minus) for an unpaid invoice.
For example, you have invoice No. 23 for 100 euros, and invoice No. 24 will be a credit note, that is, an invoice with a minus (-100). It will be issued for the same client, the same VAT. There you will need to write “cancellation of the previous order, -100”. Together they will give you zero.
If you simply miss the invoice, then the tax professionals will look for the money. Do not forget that in the Netherlands taxes are charged on the invoices issued, and not on the money received. All of your billed invoices in the period in which they are billed are subject to tax liability.
What if you want to issue an invoice, but you are not sure that the client will pay for it?
There is an offer for this. An offer is an "invitation" for payment while it is valid. But it does not lead to taxation.
Therefore, your offer may have a completely different numbering. You can number it or not number it - it remains at your discretion, since the offer is not an accounting document (it is not mandatory for payment and taxation). In essence, an offer is a commercial offer.
The signed offer does not cancel the issuance of the invoice. An invoice must be posted. The offer alone is not enough for the client (to confirm his costs) or for you (to confirm your sale).
Our specialists can promptly develop an offer together with a link to payment. More here.
And if you issued invoices under the same number to two different people?
For example, you already had invoice No. 25 and you again issued No. 25, but found an error at the end of the year. You can add in the second invoice - 25A. But this is undesirable, since when the accountant processes the invoices, the numbering will not match. The program does not accept A and B. Only the total number of invoices will match.
You can also cross out the number on the second invoice under No. 25 and write: “Consider this invoice No. 26.” According to accounting, it will be held under the 26th number. There is nothing wrong with the fact that the client at the bank writes “payment by invoice No. 25”, no. The discrepancy in the description of the payment is only important to find the purpose of the payment. The main thing is that your copy of the invoice has the correct number.
_____
Do I need to issue invoices to individuals?
Ordinary buyers, as a rule, do not need an invoice. It is not necessary to issue an invoice in this case - you can keep a register of these sales for the period.
If you have any questions, you can sign up for a consultation or come to us for accounting services. Write to us in the chat bot on the website, on the social network or by email info@nalog.nl.
