Back to basics: Invoices and the invoicing process

There are many invoicing and accounting systems out there for small entrepreneurs, but as we all know, every euro counts. So if you've just started your company and you'd want to save more, you can still do invoicing the basic method. Here's how.

1. Your company's information

It's essential to add your postal address and VAT number for the invoice. You can also add your contact details in case the customer wants to make a reclamation.

It's essential to inform when the invoice is made, the period of the invoice work, usually a month, and the due date. The due date is typically set 14-30 days, but it can also be as short as one day. The shorter the cycle is, the better for your business, but your customers might not like it. Some clients will want to negotiate on these terms, but it's easier if you've already set the length in your terms and conditions.

2. Your customers' information

You should put your customer's contact details and address, but you might consider if you want to add the customer's identification number, especially if it's a private consumer. It's safer to make a customer ID for identifying the customer.


3. Products and services

State the quantity of the product or service, details, and the time when you've executed the work and the net price, which refers to the price without the value-added tax. Every year, the VAT changes in Finland, so it gets tricky to add different VAT for different services and goods.

The general VAT is 24% and it applies to regular services and products. The reduced VAT rate of 14% applies to groceries, restaurants and catering services, and animal food. The 10% reduced vat rate applies to books, magazines, culture, entertainment, etc. The 0% tax applies to companies that export in the EU area, companies that sell and rent vessels as well as industries that operate in the health and medical fields.

Price with VAT x VAT / (100 + VAT)

You can also visit this link Alv where you'll be prompted to enter the price of the price with VAT or the price without the VAT number. It'll give you the amount of VAT also.

4. Payment details

You have to provide payment details about your bank account, BIC number and, most importantly, a reference number. A reference number is a number that your bank offers to be able to track that particular invoice.

Reference number in Finnish is called viitelaskin or viitelaskuri, and this depends a lot about your bank provider. You can provide at least the three-digit numbers from your invoice or the customer number. The bank will give you the reference number according to the figures.

Sending the invoice

You can send the invoice to the consumer by using their email, or you can send it through the post. If you send the invoice by post, then remember to have an appropriate length on the due date. It's trickier to send invoices to companies because they usually partner with third-party providers that collect their invoices for them.

This way, the client companies can easily send their purchase invoices to their accountant. The company might want you to send the paper invoice by email or post, which is addressed to the third-party provider. This way, the third-party provider can scan the purchase invoice to their accounting system. The most known providers are Maventa and Visma.