Why is the invoice issue date key to your accounting?
Posted: Wed Dec 18, 2024 4:24 am
The date of issue of an invoice is an important piece of information that must be recorded correctly to comply with tax and accounting obligations.
It should not be forgotten that the issue date is part of the content of the invoices.
To understand the path that customers take, it is very important to track the dates on which each action occurs.
The invoice issue date is one of those details that is more important than it seems. Understanding it well is, in fact, a requirement for keeping your accounts and taxes in order.
In reality, it is not just about complying with an invoicing obligation or, by extension, VAT. Everything in accounting and taxes must be balanced at the right time . Otherwise, you croatian email list could move your income, expenses and tax debts to the time you want and reality is not like that.
Download your FREE copy of the “Basic Kit for Keeping Your Accounting Up to Date”
When should an invoice be issued?
The regulation gives you four possible cases that mark the date of issue of an invoice:
Generally, at the time of the transaction . This is typical when the recipient is an individual who receives a simplified invoice, which we colloquially call the ticket.
If the recipient is another business or professional acting as such, then the deadline is extended until the 16th of the month following the month in which the VAT is due . Remember that VAT is usually due when the goods are made available to the purchaser or the service is provided.
In certain intra-Community deliveries , the deadline is the 16th of the month following the start of the shipment or transport to the purchaser.
For those subject to the VAT cash regime , the rules are quite similar. The general rule is also to invoice at the time of carrying out the transaction . However, when the recipient is a business or professional, you have until the 16th of the month following the transaction . In this case, it does not matter whether the VAT has been accrued before or after.
Also, please note that the issue date is one of the mandatory elements of invoice content . It cannot be missing from either a full or a simplified invoice.
Do you know what a payment receipt is ? Check out this article.
Accounting and the date of issue of an invoice
The moment of recording income from sales or services is determined by the transfer of control . This criterion is, broadly speaking, similar to that generally used for billing. However, there may be minor differences :
If your client is a business or professional, you have until the 16th of the following month to issue the invoice. However, if you have already transferred control of the good or service, it will have to be recorded in your accounts on that date. This does not mean that, if you do not have the data, you have to make the entry on the same day. You can wait until you have the invoice, but the date of the entry may not coincide with the date of issue of the invoice.
If you are covered by the VAT cash regime and have a transaction with deferred payment, the accrual of the tax is delayed, but not the invoice. You must issue it before the 16th of the month following the transaction. And the same thing will happen to you as in the general case. Even if you have those days to issue the invoice, the date of the accounting entry will be that of the transfer of control.
Start of marked textTWEET IT! Does the invoice issue date matter? Take note of everything you need to know to invoice at the right time.End of marked text
The tax impact of the date of issue of an invoice
At first glance, it may seem that placing an invoice a few days earlier or later may not be of much importance. However, this can change the period in which a transaction affects a tax .
In general, in the case of personal income tax and corporate tax , the usual rule would be to follow the accounting criteria with the variations established by the rules of these taxes. As we have seen, accounting establishes a date for recognizing income similar to the date of invoicing, but both are not identical.
Get maximum control of your business with Sage 50 by integrating accounting and business management in a single tool.
This is why the regulations governing billing obligations require three dates to be indicated on each invoice :
The date of issue , also called the date of issue .
The day on which the transactions were carried out . This is usually the date on which control of the goods or services was transferred. Therefore, it usually marks the period in which the settlement of personal income tax or corporate tax falls.
The date of advance payment . This is important for VAT, since if you collect payment in advance, VAT is due at that time.
The importance of data in decision making
All of the aforementioned dates have an impact that goes beyond the importance of fulfilling a tax or commercial obligation. Beyond that, together with others, such as the due date or the effective collection date, they provide key data on the calendar of operations.
With modern analysis techniques you can cross-check a lot of data. You can find out, for example, which profiles have bought from you on a certain date or how long it takes them to pay you.
For this reason, today it makes special sense to have tools that, like Sage 50 , integrate accounting information with commercial management.
Keeping all dates well noted helps you understand the entire customer journey . The dates provided by billing also help you better control your accounts, taxes and treasury.
It should not be forgotten that the issue date is part of the content of the invoices.
To understand the path that customers take, it is very important to track the dates on which each action occurs.
The invoice issue date is one of those details that is more important than it seems. Understanding it well is, in fact, a requirement for keeping your accounts and taxes in order.
In reality, it is not just about complying with an invoicing obligation or, by extension, VAT. Everything in accounting and taxes must be balanced at the right time . Otherwise, you croatian email list could move your income, expenses and tax debts to the time you want and reality is not like that.
Download your FREE copy of the “Basic Kit for Keeping Your Accounting Up to Date”
When should an invoice be issued?
The regulation gives you four possible cases that mark the date of issue of an invoice:
Generally, at the time of the transaction . This is typical when the recipient is an individual who receives a simplified invoice, which we colloquially call the ticket.
If the recipient is another business or professional acting as such, then the deadline is extended until the 16th of the month following the month in which the VAT is due . Remember that VAT is usually due when the goods are made available to the purchaser or the service is provided.
In certain intra-Community deliveries , the deadline is the 16th of the month following the start of the shipment or transport to the purchaser.
For those subject to the VAT cash regime , the rules are quite similar. The general rule is also to invoice at the time of carrying out the transaction . However, when the recipient is a business or professional, you have until the 16th of the month following the transaction . In this case, it does not matter whether the VAT has been accrued before or after.
Also, please note that the issue date is one of the mandatory elements of invoice content . It cannot be missing from either a full or a simplified invoice.
Do you know what a payment receipt is ? Check out this article.
Accounting and the date of issue of an invoice
The moment of recording income from sales or services is determined by the transfer of control . This criterion is, broadly speaking, similar to that generally used for billing. However, there may be minor differences :
If your client is a business or professional, you have until the 16th of the following month to issue the invoice. However, if you have already transferred control of the good or service, it will have to be recorded in your accounts on that date. This does not mean that, if you do not have the data, you have to make the entry on the same day. You can wait until you have the invoice, but the date of the entry may not coincide with the date of issue of the invoice.
If you are covered by the VAT cash regime and have a transaction with deferred payment, the accrual of the tax is delayed, but not the invoice. You must issue it before the 16th of the month following the transaction. And the same thing will happen to you as in the general case. Even if you have those days to issue the invoice, the date of the accounting entry will be that of the transfer of control.
Start of marked textTWEET IT! Does the invoice issue date matter? Take note of everything you need to know to invoice at the right time.End of marked text
The tax impact of the date of issue of an invoice
At first glance, it may seem that placing an invoice a few days earlier or later may not be of much importance. However, this can change the period in which a transaction affects a tax .
In general, in the case of personal income tax and corporate tax , the usual rule would be to follow the accounting criteria with the variations established by the rules of these taxes. As we have seen, accounting establishes a date for recognizing income similar to the date of invoicing, but both are not identical.
Get maximum control of your business with Sage 50 by integrating accounting and business management in a single tool.
This is why the regulations governing billing obligations require three dates to be indicated on each invoice :
The date of issue , also called the date of issue .
The day on which the transactions were carried out . This is usually the date on which control of the goods or services was transferred. Therefore, it usually marks the period in which the settlement of personal income tax or corporate tax falls.
The date of advance payment . This is important for VAT, since if you collect payment in advance, VAT is due at that time.
The importance of data in decision making
All of the aforementioned dates have an impact that goes beyond the importance of fulfilling a tax or commercial obligation. Beyond that, together with others, such as the due date or the effective collection date, they provide key data on the calendar of operations.
With modern analysis techniques you can cross-check a lot of data. You can find out, for example, which profiles have bought from you on a certain date or how long it takes them to pay you.
For this reason, today it makes special sense to have tools that, like Sage 50 , integrate accounting information with commercial management.
Keeping all dates well noted helps you understand the entire customer journey . The dates provided by billing also help you better control your accounts, taxes and treasury.