Add Invoice

Creating a sales invoice is obviously an important part of any business. In order for the process to be as easy and simple as possible a few minutes spent setting up customer and sales item details in advance is well spent. If an entity is not registered for VAT, then there will be no references to VAT in the displayed screens, also therefore ignore references to VAT in the guide below.

The Invoice transaction allows you to create/modify an invoice. A copy may be printed or emailed to the Customer.

If an invoice creation transaction has just been completed, a confirmation with the invoice number displays in a blue banner beneath the main menu area. In the confirmation line there is an option to PRINT the invoice. The invoice is created in a pdf format so that it may be printed for posting as well saved on the local computer. Where you have entered a customer email address there are two additional options and they are EMAIL and CUSTOMISE EMAIL. Both will send an email with the invoice link or attachment (as you have defined on the customer record) to the email address (and optionally a cc address) associated with the Customer. CUSTOMISE EMAIL allows you to add any additional text to the standard email. Hint, the email address will display if the mouse pointer hovers over the icon. If no valid email address has been entered then the EMAIL options will NOT display.

Note for a non VAT registered entity, reference to VAT rates and VAT amounts should be ignored.

Invoice Number

You may enter an invoice number or you may leave the field empty. If the field is left blank the next sequential invoice number is generated for you.

The next number for the sequence can be modified from the document settings screen, invoicing/credit note tab

Purchase Order Number

In an Invoice to a customer the purchase order number (P/O number) is normally the customers reference number that you want to associate with a specific invoice/credit note. This allows the customer to easily cross-reference your invoice/credit note with their purchase order.

In a Bill from a supplier the purchase order number (P/O number) is normally the order reference number that you asked them to associate with a specific invoice/credit note.

Invoice Style

You can specify the style that you would like for your printed invoice. This field defaults to the value selected on the Document Settings Screen but you can always override the default on the invoice if required.

PDF View sample standard invoice
PDF View sample service invoice
PDF View sample professional invoice
PDF View sample goods invoice
PDF View sample retail sales receipt with line item VAT
PDF View sample retail sales receipt with VAT total only

The goods invoice style is used when a product code as well as descriptions are being shown on the document. The displayed product code is set in the sales item maintenance screen

The retail sales receipt is for a situation where the document is used to confirmation that payment has been received. The version with VAT total only does not display any VAT references against the individual line items, only a total at the base of the document.

Invoice and Tax Point Date

The invoice date defaults to the current date, it may be overridden as required. If for VAT reporting purposes a different tax point date is necessary it can be added. The VAT return and VAT transaction reports will use the Tax Point date if it exists.

Customer

Enter the Customer from which the income has been received.

Auto-complete field names

Rather than a drop-down to select from a list, simply start typing and the system will identify any occurrences of the combination of characters entered and you select from that shorter list. As an example, type 'able' and the system will offer:

Able Contractors

Capable Cleaning

Reasonable Roofers

etc.

Adding new customers / suppliers

If the combination of characters you enter does not provide any results, press tab and the system will know you need to add the customer/supplier and ask you to confirm the details. At this point add address, email contact etc if required.

Ship To

If it is required that a ship-to address appears on the Invoice or Credit Note select a ship-to address associated with this Customer.

Leaving the default "Ship-to = Customer" means that only the Customer (Bill-to) address is displayed on the document.

Trading Terms

The trading terms represent the number of days by which settlement of an invoice or bill is due. The trading terms for a customer or supplier can be specified via the appropriate maintenance transaction, but can be overridden on documents if required.

When raising an invoice an additional payment terms option "Paid In Full" is available. When this option is selected an additional drop-down appears which allows you to select a bank account. If a bank account is selected the receipt will be recorded and the invoice closed.

Terms and Due Date

If defined on the customer record the terms will display automatically but can be varied if required. If not defined on the customer record then they must be defined. The Due Date will automatically complete if the terms are x number of days or an option such as 'End of Month' where the date can be calculated.

For specific terms: 'Due before Delivery'; Instalments as Agreed'; and 'As Agreed' no due date can be calculated and the 'Due Date' field is open for the user to edit the date (or enter no value). If the 'Due Date' is left blank the invoice will be considered as currently outstanding on your Aged Debtors reports.

Message

You can enter up 200 characters of additional free format text for printing on the invoice. This text will appear in the area allocated towards the bottom left of the invoice.

Adding the line item details of the Invoice

The line items that make up the Invoice value now need to be added. A line item is a number of units of a Sales Item extended by the unit value to give the total invoiced amount.

ADD ITEM button accesses the line item input. Select the Item from the drop-down. Default values, if they exist, for Rate (Unit sales price) and VAT Rate (If VAT registered) are displayed. These defaults may be overridden. Enter any Notes (This will be printed on the Invoice) and then enter the Quantity for the sales item. The system will extend the values and summarises them.

SAVE ITEM button saves that line item in the screen. Clicking ADD ITEM button on each occasion allows user to enter further Line items. UNDO ITEM cancels the current line item data.

Sales Item

A list of sales items offered by the organisation.

Consultancy Services

Design Consultancy

Office Contracting

etc.

If the combination of characters you enter does not provide any results press tab and the system prompts for a new sales item to be set up. Navigate to the Sales Items menu.

Income - Sales Items - Add

Enter sales items information as usual.

Notes

The Notes field can be used to enter free format descriptive text. Click on the notepad edit-16-grey symbol to open a dialogue screen where up to 750 characters may be typed in.

The note will appear as text against the line item on the invoice

Rate

The rate for the selected sales item is the default unit amount set up when the the sales item was created. The default rate can be overridden if required.

Net Amount

The net amount associated with the item.

When recording purchases, if you have a gross amount and want liberty to calculate the net amount and vat amount simply enter the gross amount in this field, select the appropriate VAT code, and type "g" in the VAT amount field.

VAT Rate

The appropriate VAT rate for the account must be selected. Default VAT rates can be associated with an account via the Account Maintenance screen which is available from the chart of accounts view.

If the business is on the HMRC Flat Rate VAT Scheme, as defined on the VAT details tab of the Business Profile, the VAT rate will default to "Out of Scope" for all purchase transactions. This can be changed if necessary. Exceptions may apply for purchases of capital assets of significant value, please consult your professional advisor.

Current VAT Rates

20.0%, 5% & Zero, used for normal UK VAT transactions.

Exempt

Used when a transaction is an exempt supply; such as the purchase of insurance. See the VAT Guide (Notice 700) for more details or visit the Revenue and Customs site at www.hmrc.gov.uk

Ended 31/12/2020 except for Northern Ireland - EU Acquisition

Used when you purchase goods from a VAT registered supplier in an EU member state. Make sure that the VAT code is set to EU Acquisition, and that the VAT amount shows the VAT which would have applied if the purchase had taken place in the UK. The correct country must be set on the supplier record to ensure correct reporting of the transaction.

No longer in use , kept for historical record only - EU VAT

Only used if you have you have incurred VAT in an EU member state, (i.e. local VAT). This CANNOT be recovered as input tax for UK VAT. You may make a claim for refund from the member state. A scheme exists to do this known as "Refunds of VAT in the European Community for EC and non-EC businesses" The details are in notice 723, refer to the Revenue and Customs site at www.hmrc.gov.uk Use of this VAT code is described more fully in the "VAT and Liberty Accounts" user guide.

Out of Scope

Used when a transaction is not in the VAT system at all. For example payments into a money purchase pension scheme are out of scope because they are equivalent to savings. Recording a payment of VAT to HMRC is a common example where Out of Scope should be used, as are salary payments and repayments of director loans. Using this code will result in no VAT reporting impact.

None

This code is used where there is no VAT on a purchase transaction, typically from a supplier who is not vat registered. This is not the same as zero rated, exempt or out of scope. The impact is that the value of the purchase is included in box 7 of the VAT 100 return.

20% and 5% Domestic Reverse Charge (Used on Sales Invoices only)

Use either of these codes when a sales invoice is being raised that is subject to domestic reverse charge VAT. This has the impact of not adding a VAT amount to the invoice total but annotates that domestic reverse charge applies.

Where domestic reverse charge apples to a customer (receiving a bill with domestic reverse charge notification) see the special note below.

Average

This code can be used where there the transaction is recording an aggregation of mixed VAT codes in a single entry with the VAT amount manually set as required.

Import VAT (Used on Purchases only)

This code is used if the organisation buys goods from outside of the UK for use in the business then it may use a system called postponed VAT that allows it to account for VAT on the VAT 100 return rather than paying VAT immediately at the point of entry. This is a potentially complex area and so we strongly advise you consult with your advisor.

Special Note - Reverse Charge VAT

Reverse Charge VAT

Reverse Charge Procedure (for services from foreign suppliers)

If you are a VAT registered business in the UK and receive services from suppliers in other countries you may have to account for VAT to HMRC. This is known as reverse charge. The system provides a procedure for dealing with this.

Enter the transaction normally and select an appropriate Standard Reverse Charge VAT rate that would apply if the purchase had taken place from a UK supplier. The appropriate entries are made to the VAT100 report and any VAT transaction reports.

The system impact is to add to the VAT control account an amount of output tax (as if a sale) calculated on the full value of the supply received, at the same time add (subject to the normal rules for deduction of input tax) the same amount of VAT as input tax to the VAT control account. The net impact on VAT is zero; additionally the VAT100 return also displays sales and purchase values in the appropriate boxes.

Domestic Reverse Charge

Domestic reverse charge is essentially an anti-fraud measure and applies to a range of goods and services transacted between UK VAT registered suppliers and customers and includes:-

Mobile Phones
Computer Chips
Wholesale Gas, Electricity and Telecommunications
Emission allowances and renewable energy certificates
Building and construction services, both buying and selling (from 1 March 2021)

For customer receiving a bill subject to domestic reverse charge

Enter the bill or payment in the normal way select an appropriate Domestic Reverse Charge VAT rate that would normally apply as notified on the bill. The appropriate entries are made to the VAT100 report and any VAT transaction reports.

Note that the system distinguishes between domestic and non domestic reverse charge by the country stored on the supplier record.

VAT Amount

The amount of VAT charged on this item is automatically calculated based on the vat code selected but can be changed.

When recording purchases, if you have a gross amount and want liberty to calculate the net amount and vat amount simply enter the gross amount in the net amount field, select the appropriate VAT code, and type "g" in the VAT amount field.

Departments, Activities and Funds

Line item entries may be analysed to Departments and/or Activities where this has been activated. In addition, for Not-for_profit Organisations a Fund must be selected.

In each case use the drop-down to choose the analytical area appropriate to the line item. If no selection is needed just leave the field or select Not Applicable.

For information about analysis areas see Sites, Departments and Activities

To record the transaction click on the SUBMIT button.

Analysis Tab

Write-Off

Use this flag to set the status of a receivable item to "written-off". You can also reverse the "written-off" status of an invoice in an open year.

Note that if you are VAT registered under the standard scheme this transaction will recover the VAT of the original invoice, or a portion of the VAT if the debt has been partly settled. Current VAT legislation states that VAT on written-off invoices may not be recovered until 6 months have elapsed after the original due date.

Action Box

Once an invoice has been created and stored, a user Opening the transaction will see , just below the header area, an action box symbol. This provides quick access to: -

Print: to open a pdf of the document for printing or storing.
Email to......: to email the document to the email address displayed.
Memorise and Schedule: to open a screen to set up a memorised or scheduled transaction based upon this transaction. More information is available from this Memorised Transactions link.
Audit: to open a transaction audit report that provides a non-editable history of the transaction and its accounting impact. The report details which user recorded the initial transaction together with the date and time as well as the details of any subsequent amendments.
Delete: to remove the invoice. Note if a receipt has been allocated to the invoice or it has been included in a filed VAT return the delete option will not be available.