Sometimes a customer wants you to invoice in advance (i.e. before the work is done). Then you can. You send the invoice and the customer pays. There are a few points of interest, especially when it comes to the end of the financial year. So you invoice for something in December that you perform in January or later.
Method
- Send an invoice.
- Invoice must be included in December (due to VAT).
- Send your Bookies an email (if it is not clear that the work is for next year.
- We then book costs/revenues in the background to next year
Points of attention
In principle, the moment at which the invoice is sent is important for the VAT return. However, if the VAT rate changes later, you must send an invoice for the VAT difference for the hours you still have to work.
For your annual accounts and therefore the income tax return, we as your accountants must correct the income for the year in which the work is actually carried out. Work that has not yet been invoiced must therefore be included on the balance sheet. Work invoiced in advance is not officially income, but work invoiced in advance.
For an ICP declaration (read: something with a foreign country), the quarters in which the work was carried out apply in principle. In practice, it is customary to use the invoice date, if it does not deviate too much.
In principle, the Tax Authorities require you to invoice no later than after the month of completion, before the 15th. This has to do with the VAT payment.
Case
Case: question
I have one (or maybe two) clients who would like to send the invoice in 2023, while the work will be in 2024. Can we book this as an advance receipt? And do I have to do anything for this when I create the invoice?