What should the invoice from the e-shop contain ?

Before we move on to the actual details of an e-shop invoice, let’s try to think together about which group of people are usually the final customers of e-shops. I suppose the reasoning need not be long. They are generally ordinary citizens (i.e. not taxable for VAT purposes). Our reasoning can go on and on. What happens to the invoice that is sent to the customer by the e-shop, either in electronic form or packed directly into the package? With a physical invoice, the customer will probably throw it in the trash first. The electronic invoice may only be archived by the more “honest” ones in case of a claim or return of goods. Is an invoice even necessary? If so, in what form and what should it contain?

From the position of the final customer we move to the position of the e-shop and our obligations regarding the invoice. We will not discuss whether an invoice is even necessary from a legal and tax point of view at the moment, as there may be x number of variables (nature of delivery, type of customer, type of seller, country of destination, etc.). Rather, we will focus on what it is good for the invoice to contain “technically“.

10 Tips and Tricks that make it easier for an accountant to work with invoices from e-shop

The formal side of the invoice is usually based on structured data (information) that is directly reflected on the invoice. At this point, we are not going to be very interested in the “layout” of the invoice itself, but rather in the content.

1. Variable Invoice Symbol – I dare to say that this number is one of the most important numbers on the invoice for the accountant, unless the e-shop uses a unique IBAN system. Why, you ask? It’s very simple. The variable symbol is our “key word” that the accountant can use to identify a specific order, pay the invoice, find and match the payment to the invoice and close the process. Setting up the correct variable symbol has a few pitfalls to avoid, as they can complicate your accounting automation at the end of the day.
2. Information about the method of payment – most e-shops use several types of payment gateways or cash on delivery companies. With hundreds or even thousands of invoices, it often happens that some invoices are shown as unpaid in the balance account. For accounting clarity, it is important to have all payments paired across payment gateways and CODs.
3. Invoice payment – when paying an invoice, the basic rule applies – the currency in which the invoice is issued is the currency in which the payment for the invoice should be received and vice versa.
4. Some e-shops are growing very dynamically – this means that what they were able to track with hundreds of invoices is no longer possible with thousands. Every entrepreneur is interested in the profitability of the individual countries, markets or domains from where the goods/services were purchased. It is therefore advisable to set up the correct structure of analytical accounts, individual centres, contracts or activities from the outset. At the end of the day, proper implementation of individual “tags” in invoices can save you time spent on excel spreadsheets dividing up individual revenues as needed.
5. From 01.07.2021 the amendment to the VAT Act entered into force a special regulation of the OSS tax, which on the one hand facilitates entrepreneurs to pay VAT for individual Member States through the Slovak financial administration, but on the other hand it can cause considerable problems when issuing invoices under individual tax rates according to the country of supply of the service/goods. If you mix in invoices issued in foreign currencies and their conversion to EUR, this can add up to quite a significant complexity for your accountant. Therefore, take advantage of our experience with the set VAT rates for EU member states and prepare your e-shop for VAT filing via the single OSS regulation.
6. Date of delivery – date of issue – date of order. So many dates and which one is the most important in terms of accounting and VAT filing? Many e-shops confuse the date of delivery with the date of the order or the date of the invoice. Note, however, that the date of issue may be the same as the date of delivery, but may not be the same as the actual delivery of the consignment (especially in the case of cash on delivery).
7. Invoice numbering – one of the tools to easily separate different countries or types of invoices (credit note, bill of lading) is the numbering itself. As with the variable symbol, it is a good idea to avoid certain characters when numbering invoices and to set the logic of the number series correctly. If you can’t cope with the number series, contact our professionals.
8. Invoice for B2B and B2C and differences in issuing – Most e-shops operate in the B2C segment, where the rules are relatively simple. The difference arises in the B2B segment, where incorrect setting of the VAT ID number or VAT ID number control may complicate the accountant’s reporting in the summary statement, possibly incorrectly charged VAT or even uncharged VAT. Tax control tends to be uncompromising, and it can be painful to finish such deliveries, even with possible interest on late payment.
9. Linking invoices to stock – e-shops focused on the sale of goods often have a problem with the stock records themselves. The ideal way to link the warehouse and the accounting itself with the invoices issued using stock with unique SKUs can simplify the actual work with the invoices issued. With the right warehouse management setup, you get the advantage of exports from your accounting software for evaluating the profitability of individual products.
10. Invoice issued for influencers – the digital-consumerist age also requires a different approach to achieving marketing goals. One of them is also sales promotion by advertising through influencers who “promote” the goods/services on various social networks, usually through the so-called “influencers”. barter, i.e. he gets for free the products he “promoted”. Do these products also need to be invoiced? If so, how much?

Invoices abroad

Every accountant has come across a foreign invoice at least once. Domestic invoices are usually easy to read and understand – as they must be for tax control purposes. However, what about invoices we issue abroad and their recording obligation for VAT purposes with respect to other EU countries? If you sell goods or services to EU Member States, it is your responsibility to issue invoices based on the rules of the Member States of identification. Therefore, the taxable person should find out what invoicing rules apply in the Member State of consumption (of the customer). The rules can vary from the formal side (language, information about the goods/services, dates) to the visual side (predefined invoice format).

Mandatory elements of the invoice

According to § 74 para. 1 of the VAT Act the invoice must contain the following:

• the name and surname of the taxable person or the name of the taxable person, the address of the taxable person’s registered office, place of business, place of business, place of residence or address of the place where the taxable person usually resides, and the tax identification number under which the goods or services were supplied by the taxable person,
• the name and surname of the recipient of the goods or services or the name of the recipient of the goods or services, the address of the recipient’s registered office, place of business, place of business, place of residence or address of the place where the recipient usually resides, and the tax identification number under which the goods or services were supplied to him,
• the serial number of the invoice,
• the date on which the goods or services were supplied or the date on which payment was received, if that date can be determined and if it differs from the date of the invoice,
• the date of the invoice,
• the quantity and type of goods supplied or the extent and type of service supplied,
• the tax base for each tax rate, the unit price excluding tax and discounts and rebates if not included in the unit price,
• the tax rate or exemption applied; in the case of exemption, reference shall be made to the provision of this Law or of Council Directive 2006/112/EC of 28. November 2006 on the common system of value added tax, as amended, or the verbal information “the supply is exempt from tax”,
• the total amount of tax in euros to be paid, except for the amount of tax applied under the special arrangement in section 66,
• the wording ‘invoice made out by the customer’, where the customer who is the recipient of the goods or services makes out an invoice pursuant to § 72 par. 6,
• the words ‘reverse charge’ where the person liable to pay tax is the recipient of the goods or services,
• data on the new means of transport delivered pursuant to § 11 par. 12,
  (m) the wording ‘surtax adjustment – travel agents’ where special arrangements under section 65 apply,
• the words ‘surtax adjustment – second-hand goods’, ‘surtax adjustment – works of art’ or ‘surtax adjustment – collectors’ items and antiques’, depending on the goods to which the special arrangement under Article 66 applies,
• the name and surname or the name of the tax representative pursuant to § 69a or § 69aa, the address of his/her registered office or residence and his/her special tax identification number, if the foreign person is represented by a tax representative pursuant to § 69a or § 69aa.