Writing an invoice in 5 steps
- Willeke Leensma
- How to
- 12 Sept 2021
- Edited 2 Sept 2022
- 4 min
Your job is done, so it is time to send your customer an invoice. But what do you include on an invoice? And how do you ensure that your customer pays quickly? The Tax and Customs Administration imposes a number of requirements on invoices. You have to comply, otherwise you and your customer cannot offset the VAT. These 5 steps will help you write invoices that meet all the requirements.
1. What to include on your invoice
The following must be stated on your invoice:
- Your VAT identification number and the VAT rate that is applied;
- The total amount due, excluding and including VAT;
- Your KVK number (from your registration in the Commercial trade Register);
- The invoice date and number (your invoices must be consecutively numbered);
- The delivery date;
- Your name and address and that of your customer;
- The goods or services you supplied;
- How many goods or hours you charge.
You can find all the invoice requirements on the website of the Belastingdienst (Tax and Customs Administration).
Tip: are you making use of the Small Businesses Scheme (KOR)? You do not have to send an invoice but you can. If you do, do not include a VAT percentage or VAT amount. You can explain this by stating that you are exempt from VAT. Your invoice does not have to comply with the invoicing requirements. Purchasing invoices must be kept in the administration.
Is the invoice amount, including VAT, less than €100? Then you can write a 'simplified' invoice (Belastingdienst, in Dutch), with at least the following information:
- The date you sent the invoice.
- Your name and address details.
- Which goods or services you have supplied.
- The VAT amount.
Your invoice and the GDPR
The General Data Protection Regulation (GDPR) is the privacy law that applies for all entrepreneurs since May 2018. Anyone who works with personal data must comply with the GDPR. You have to be able to prove exactly what you use (potential) customer data for and how long you store the data. You also store personal data in your records. For example, when you process customer information to draw up an invoice, that already falls under the GDPR. Find out how to make your business GDPR-proof and avoid any fines.
2. Make sure your invoice has a clear layout
An invoice must look clear and well-organised. Your logo and company name need to stand out immediately. At a glance, your customer can see the amount to be paid, the payment term, and your bank account details or payment link. If you invest in the format and layout of your invoice from the start, this will save you time later on. This invoice example from the Netherlands Chamber of Commerce KVK (pdf) helps you create your own invoice format.
3. Send your invoice right after finishing the job
Send the invoice to your customer as soon as possible after finishing the job. Your work or delivery will still be fresh in their memories. In any event, send your invoice before the 15th day of the month following the month you delivered your product or service. This is called the issue date and is determined by the Tax and Customs Administration.
Example: You completed your assignment on 5 August. Then the invoice must be sent before 15 September.
Clearly state when the invoice must be paid. You can do this in advance in your quotation and general terms and conditions. You can offer various payment options: payment in advance, immediately on delivery, or within a payment term. State the payment term clearly in your invoice.
There are entrepreneurs who offer customers a discount if they pay the invoice immediately. You can also use factoring or a debt collection contract, if necessary.
4. Creating and sending invoices online
You should preferably send an electronic invoice (e-invoice) to your customers. E-invoicing is not simply sending a scanned invoice, but a digital invoice in XML format. Through e-invoicing, your invoice is always sent via a secure server and always correctly received. The data required on an e-invoice is in a fixed place with its own coding. This makes it possible to automatically process e-invoices in your records and in your customer's administration.
Do you find it difficult to use e-invoicing? RVO has made an infographic (in Dutch) so you can determine which way of e-invoicing suits your company best.
Is e-invoicing mandatory?
Entrepreneurs who do business with the central government are obliged to send e-invoices. Municipalities, provinces, and water boards are also able to receive e-invoices. Are you participating in a tender? Then e-invoicing is often mandatory.
Ways to send e-invoices
There are various ways to send e-invoices to local authorities such as water boards, municipalities, and provinces:
- Through the secured network Peppol. Check with the Netherlands Peppol Authority how to use Peppol.
- Through an email with an XML attachment. This is the e-invoice that your accounting software creates.
- Manually via an online portal of an ICT service provider, if you do not use an electronic accounting programme.
Which accounting package fits your business?
You can do your administration in different ways. You can collect your receipts and outsource everything to your accountant. Or you can handle your own administration. Which online accounting software fits your needs depends on your wishes and requirements. Choose an accounting package that is user-friendly and meets all the security and privacy requirements.
An online administration offers advantages. With Excel sheets, for example, you cannot monitor outstanding invoices. Invoices should be made separately in Word. Because you do it manually, there is a higher risk of errors. With an online accounting programme, you can work faster and you do not have to enter everything by hand. The software also automatically keeps track of whether your invoices have been paid or are still outstanding.
New regulation: payment term from 60 to 30 days
Since 1 July 2022, large companies have to pay invoices from small and medium-sized businesses within 30 days. This is half of the previous 60-day payment term. This new statutory payment term ensures that smaller businesses receive their money faster.
5. Save your invoices for at least 7 years
You may scan invoices and receipts and save them digitally. The legal storage period is 7 years. For immovable goods, a period of 10 years applies. The Tax and Customs Administration finds it important that you are able to hand over your records within a reasonable time period. Use a system that suits your business. You must always keep a (digital) copy of the invoices you send.
Watch this video to go through the 5 steps again. No English subtitles available yet - sorry.