Even a small business invoice requires a high degree of accuracy for correct invoicing. Invoicing errors are annoying and usually time-consuming. In order to protect you from the worst mistakes, in this article we explain the most important rules that you as a small business owner should know for correct invoicing.
1. Small business invoice – note §19
Entrepreneurs who have less than EUR 17,500 in sales in the previous year and less than EUR 50,000 in the current year can make use of the small business regulation under Section 19 of the Sales Tax Act. You can therefore refrain from reporting and paying sales tax. However, it must be pointed out on the invoice that no sales tax is shown due to the regulation. This can be done with the following sentence: According to § 19 UStG, the amount does not contain any sales tax.
2. The correct submission of the small business owner invoice
You can send the small business invoice by post, fax or electronically by e-mail. You should only make sure that the file you are sending cannot be changed easily. This is possible with a PDF file, for example. Do not send invoices in open Word .doc or even as .txt files.
3. Correct storage of your invoices
According to the requirements of proper bookkeeping, you must keep incoming invoices and copies of outgoing invoices for 10 years. The invoices may not be changed after they have been sent. A simple solution for safe storage is the archiving of invoices with the billtano invoice software.
4. Mandatory information on invoices
An invoice must contain the following information in order to be issued correctly:
- Full address of both parties – i.e. the service provider and the service recipient.
- Tax number – this is assigned to every trader by the Federal Tax Agency.
- Sales tax identification number – short VAT ID number. must be on invoices to other European countries.
- Invoice date – on which the invoice was issued.
- Service and quantity – it goes without saying that the invoice must show which service or which product was purchased.
- Service period – in which the service was created.
- Invoice Amount – The amount to be paid.
- Tax Amount – the tax amount included in the invoice amount and the tax rate must also be visible on the invoice.
- Notes on tax exemption – If the service is provided as a so-called intra-community service or as a small business with VAT exemption, corresponding information must be found on the invoice: “According to § 19 UStG the invoice amount does not include salestax.” or “According to § 6a UStG is the intra-community service tax-free.”
- Rebates & cash discounts – if rebates or cash discounts are agreed in the invoice, these must also be shown.
- Bank details – You should write your bank name, account holder, IBANand BIC number on your invoice so that the recipient can pay them.
Optional information, such as separate agreements on the payment term (a payment term of 30 days applies by law) can of course also be added to your invoice. You can also define a place of jurisdiction. If all of the mandatory information listed is included in your invoice, you can send the invoice without hesitation.