Account Wryte Ltd

ELECTRONIC INVOICES

Following on from last month’s article on an insight into invoicing and VAT, another area that can cause concern for small businesses is electronic invoicing.

More and more frequently now, you will find the larger companies informing you that they will no longer issue paper invoices, but electronic ones, which allow you to either access your account on the internet with them and download your invoice, or they send you the invoice in an attachment.

This is extremely cost effective for the large companies, passing on their costs to the smaller companies..  Your electronic invoices must include the same information as paper invoices. As with paper invoices, it is not enough just to produce an electronic invoice - you must actually send it to your customer.

Ways to send electronic invoices

There are several ways of sending invoices electronically. You could use:

·       email messages

·       document attachments to emails, such as PDF or XML files

·       secure networks

·       secure websites

·       electronic data interchange (EDI)

As long as you make sure that what you send to the customer is what they receive, any of these methods is acceptable.

Storing electronic invoices

As with paper, you need to keep proper records of all electronic invoices you send and receive for six years. If you upgrade to a new computer system which is not compatible with your old system, you must make sure that the records held on your old system remain accessible for up to six years. If this is not possible, then you must make paper copies.

You can also keep your records on microfilm or microfiche, as long as you have received approval from HMRC and it is easy for VAT officers to view those records when they need to.

You need to store your invoice data securely in a way that allows you to:

·       keep all original invoice data

·       prevent data from being corrupted

·       reproduce original invoices at any time in a readable format

·       find details of any invoice quickly and easily

At the very least, you should consider password-controlled access to your invoice data, and taking regular backups - and checking that you can recover from backup reliably.

them for HMRC within a reasonable time and in a readable format.

Producing invoice records for HMRC

When they check your VAT records, HMRC will need to see your electronic invoices in a readable format. For more complex systems this might mean holding data in a way that allows for it to be converted to a readable format, or it might simply be that you are able to print out an email or invoice attached to an email when requested to do so by HMRC.

There is much to HMRC’s legislation and it is advisable you seek the advice of a qualified appropriate accountant. 

Please contact :   Dawn Johnson FMAAT (see advert below)