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Invoices

Posted: Tue Feb 01, 2011 5:01 am
by josh
Overseas customers always ask for invoices for tax reasons. How is an invoice objectively different than an order receipt, other than the fact I put my address on it? Could a customer overseas legally just take my address off the contact page, slap it on the top of the receipt and use that for tax? I know an order receipt is every bit as good as an invoice over here in the USA, what is so magical about invoices overseas? :D

So the most recent customer, wrote back and said putting my address on it doesn't make it an invoice ?? Needs an 'invoice ID' now, I just edited the word 'order ID' to read 'invoice ID', I guess that magically makes it an invoice now in certain jurisdictions and it would be fraud for him to edit the file himself?? What an inconsiderate tax collection office though, being so picky.... they should just take your money and be happy. lol

Re: Invoices

Posted: Tue Feb 01, 2011 3:04 pm
by Doug G
Typically an invoice is a document for requesting payment, and a receipt is a document acknowledging payment.

In the US there are income tax implications. For example, if your company files tax using the accrual method, you must generate an invoice when the work is billed, and that's when the revenue is booked as income even though you may provide a receipt some days or weeks later when you receive payment. However, the invoice is revenue to your company regardless of payment or non-payment by the customer.

Re: Invoices

Posted: Wed Feb 02, 2011 1:44 am
by josh
Doug G wrote:Typically an invoice is a document for requesting payment, and a receipt is a document acknowledging payment.
And the difference is just the word 'invoice' at the top?
In the US there are income tax implications. For example, if your company files tax using the accrual method, you must generate an invoice when the work is billed, and that's when the revenue is booked as income even though you may provide a receipt some days or weeks later when you receive payment. However, the invoice is revenue to your company regardless of payment or non-payment by the customer.
So are you saying that without the invoice they wouldn't be able to pay taxes? That doesn't make sense, I did read up that some people do their taxes this way but why would it be required? Especially despite the fact the invoice has all the same info as a receipt, the only difference is the meaning humans assign to the meaningless word 'invoice' that gets perpended to the top, am I right?*

*I know a bigger company may invoice for $100 and clients may make payments, but for me invoices will always be the same as the orders, so am I really doing anything besides writing the word "invoice"? Why would such a practice be mandated in any country. When these companies goto Dunkin Donuts and buy the employees coffee do they ask Dunkin Donuts for an invoice? lol...

Re: Invoices

Posted: Wed Feb 02, 2011 10:38 am
by Doug G
Consult your business & tax advisor.

Re: Invoices

Posted: Thu Feb 03, 2011 4:30 pm
by josh
I'd rather not pay someone to have a simple question answered. I was just curious. Anyone else?

Re: Invoices

Posted: Thu Feb 03, 2011 4:42 pm
by John Cartwright
The difference is in their principal.

Invoice - Notification of outstanding payment
Receipt - Confirmation of payment received

They are nearly identical otherwise. So yes, technically they would be able to fill out their taxes.

Re: Invoices

Posted: Fri Feb 04, 2011 8:33 am
by josh
John Cartwright wrote: So yes, technically they would be able to fill out their taxes.
Thanks that's the answer I'm looking for. Not to second guess but how sure are you? (because I'm going to deny requests for invoices in the future, as it seems like a waste of time)

Re: Invoices

Posted: Fri Feb 04, 2011 8:50 am
by John Cartwright
josh wrote:
John Cartwright wrote: So yes, technically they would be able to fill out their taxes.
Thanks that's the answer I'm looking for. Not to second guess but how sure are you? (because I'm going to deny requests for invoices in the future, as it seems like a waste of time)
I'm pretty sure, but I'm not a tax advisor or an accountant, so I would still suggest consulting a professional. However, from personal experience, I have know many businesses to use their sales receipt as an invoice (they use the terms synonymously). The difference is usually the receipt contains additional information about the payment, such as how it was paid (which usually is not important for tax purposes).

Re: Invoices

Posted: Fri Feb 04, 2011 11:02 am
by josh
Thanks that answers my question.

But yea, most likely any tax professional in my area would not specialize in tax law not pertaining to Netherlands, for example. I usually just do tax stuff myself to save money. You can call the IRS and ask questions you'd normally ask an accountant, but I doubt they'd be able to speak affirmatively on the tax law of foreign countries.

Anyways, I opened the receipt, changed "transaction ID" to "invoice ID" and the client hasn't written back yet, so I guess that eased whatever concerns he had. I posted the thread because it seems most of my international clients ask me to do this 8O Seems foolish & pointless