What Is it an invoice? See what it's for and learn how to issue one!

What information should the Invoice contain?

To be effective and fulfill its legal and accounting function, an invoice must contain several essential pieces of information. This information ensures that all parties involved in the transaction clearly understand the terms and can manage their finances appropriately. The fundamental elements that an invoice must include are:

• Seller Information: Company name, address, telephone number, email address and tax identification number.
• Buyer Information: Company or individual name, address, telephone number, email address, and tax identification number, if applicable.
• Invoice Number: A unique identification number for internal control and tracking.
• Date of Issue: The date the invoice was issued.
• Description of Products or Services: Clear and accurate details of the items or services provided, including quantities, units and relevant specifications.
• Unit Price: The individual cost of each product or service.
• Total Value: The total cost of the transaction, including the sum of all items or services.
• Taxes and Fees: Specification of applicable taxes, such as VAT or ICMS, and any other additional fees.
• Applicable Discounts: Information about any discounts offered and the conditions under which those discounts apply.
• Payment Conditions: Agreed payment terms, including payment due date, payment options (bank transfer, credit card, etc.), and possible late payment penalties.
• Shipping Costs: If applicable, details of shipping or delivery costs.
• Banking Information: Seller's bank account details to facilitate fund transfer.

A complete and detailed invoice helps avoid misunderstandings, facilitates auditing and financial control, and ensures that all parties fulfill their obligations efficiently and transparently.

Who should prepare the invoice? Whose responsibility is it?

The responsibility for preparing the invoice falls on the seller or service provider, as they are the ones who need to document the commercial transaction and request payment from the buyer. It's essential that the seller issues the invoice as soon as the products or services are delivered, ensuring that all relevant information is accurate and up-to-date.

Seller's Responsibility

• Invoice Issuance: The seller must issue the invoice, including all necessary details about the transaction.
• Accuracy of Information: It is crucial that the seller ensures the accuracy of all information contained in the invoice, from product details to payment terms.
• Shipping to Buyer: After issuance, the seller must send the invoice to the buyer in a timely manner, either electronically or physically.
• Storage and Recording: The seller is also responsible for storing a copy of the invoice for accounting and tax purposes, as required by local laws.

Buyer's Responsibility

• Receipt and Verification: The buyer must receive the invoice and verify that all information is correct and in accordance with what was agreed.
• Payment Processing: The buyer is responsible for processing payment according to the terms specified in the invoice.
• Discrepancy Reporting: If there is any discrepancy or error on the invoice, the buyer must notify the seller immediately for correction.

Both parties must collaborate to ensure that the billing process is transparent and accurate, facilitating financial management and compliance with tax obligations.

How to Issue an Invoice? Step by Step

Issuing an invoice is a simple process, but it requires attention to detail to ensure all necessary information is included. Here's a step-by-step guide to help you issue an invoice correctly:

1. Choose a Billing Tool or Software:
   • Use reliable invoicing software like QuickBooks or FreshBooks, or a free online service like Invoice Generator. These systems help automate and simplify the invoice issuance process.
   • Recommended sites:
     • QuickBooks
     • FreshBooks
     • Invoice Generator
2. Configure Company Details:
   • Enter your company's complete information, including name, address, phone number, email address, and tax identification number (CNPJ in Brazil).
3. Add Customer Details:
   • Include complete customer information, such as name or company name, address, telephone number, email address, and tax identification number, if applicable.
4. Enter the Date and Invoice Number:
   • Set the invoice issue date and assign a unique identification number to the invoice for internal control and tracking.
5. Describe the Products or Services:
   • Detail each item or service provided, including clear descriptions, quantities, and unit prices.
6. Calculate the Total Amount:
   • Add up the prices of the products or services and include any applicable taxes, such as VAT or ICMS, discounts, and additional costs, such as shipping.
7. Specify Payment Terms:
   • Indicate payment terms, including due date, accepted payment methods, and possible late payment penalties.
8. Review and Submit the Invoice:
   • Double-check all information to ensure accuracy. Then, send the invoice to the customer via email or through their billing system.
9. Store a Copy:
   • Keep a copy of the invoice issued for accounting and auditing purposes.

Example of Issue Using Invoice Generator

1. Access the Invoice Generator.
2. Enter your company and customer information in the fields provided.
3. Add the date, invoice number, and details of the products or services.
4. Automatically calculate the total, including taxes and discounts.
5. Specify payment terms.
6. Review the information and click “Download” or “Send” to send the invoice directly to the customer.

Following these steps will ensure you issue accurate and professional invoices, helping you maintain your company's financial organization and compliance with legal obligations.

What is the difference between an Invoice and a Tax Note?

Although the terms “invoice” and “nota fiscal” are often used interchangeably, especially in international contexts, they have important differences worth highlighting.

Main Differences

• International vs. International Use National: Invoices are widely used in international transactions, while tax notes are required for domestic transactions, as per local legislation.
• Main Objective: An invoice is intended to document a transaction for commercial and accounting purposes. The invoice also serves to record the transaction for tax purposes.
• Legal Requirements: The tax invoice must meet specific requirements established by the local government, including electronic issuance (NF-e) and integration with tax systems. The invoice has fewer legal restrictions and is more flexible in its formatting.
• Content: While both documents contain detailed information about the transaction, the tax note includes specific fields for local taxation and regulations that may not be present on an invoice.

Recognizing these differences is vital for companies operating in both domestic and foreign markets, as it facilitates efficient financial management and ensures compliance with legal obligations.