Invoices

Invoices are legal documents, essential in the invoicing process, considering that they prove a commercial transaction between an entity and a buyer.

Types of invoices

Invoices are legal documents that detail the provision of goods and services, including all elements involved in a commercial transaction, namely, the organization, customer and product data being traded.

Even if not requested by the customer(s), issuing invoices is mandatory to comply with the fiscal requirements.

According to the requirements of each sale, it is possible to issue different types of invoices, according to the type of activity and operations, as well as the values involved.  It is possible to issue:

• Invoice: when an item is purchased, but the payment is not performed right away;
• Simplified Invoice: this type of invoice can only be issued in Portugal and must meet some criteria:
  – When retailers/street vendors sale of goods to a final customer, a non-taxable person;
  – When the total amount of the good transaction is inferior to 1000€;
  – When the total amount of the service transaction is inferior to 100€;
• Cash Invoice: in the case of a cash purchase. This type of invoice includes the invoice and the receipt in a single document.

Issuing and duplicating invoices

After creating the type of invoice desired, you can issue the necessary invoices, by specifying all customer and payment information. The Invoicing Engine also allows to duplicate these records with all information from the original invoice, which streamlines the process of creating invoices.

To issue and/or duplicate invoices, follow these steps:

Issuing invoices to intracommunity customers

To issue invoices to an intracommunity or external market customer, it is necessary to associate the information on the VAT Regime to the customer file. This association must be performed in order for the transactions with this type of customers to comply with specific VAT schemes when invoicing.

For example, a company based in Portugal must select on the customer file, the CONTINENTE-UE scheme in the case of intracommunity customers or CONTINENTE-EXPORT in the case of customers from outside the European Union. This way, the transactions with these types of customers will comply with the specific VAT schemes when invoicing and all VAT rules will automatically be followed.

To associate tax regimes to the customer, follow these steps:

1. Access Customers and Items;
2. Select the desired customer or, if non-existent, click Create;
3. On the tab Customer, select the desired tax on the field Tax Regime;
   Note: You must select the tax according to the corresponding tax regional area;
4. Click Save and New.

This way, when issuing an invoice to an intracommunity or external market customer, on the tab Taxes associated to the document, the corresponding VAT regime will be suggested.

The app includes the configuration of a wide range of VAT schemes, including the schemes associated to the markets.

Issuing advance payment invoices

It is possible to issue invoices for advance payments received before the transaction of goods or the provision of services. According to the VAT Code (CIVA), every time you receive an advance payment for an order, you are required to issue an invoice or a similar document for the amount received.

As explained in paragraph b), no.1 of article 29 of CIVA, you must "compulsorily issue an invoice for each transaction of goods or provision of services, as defined in articles 3 and 4, regardless of the quality of the buyer of the goods or recipient of the services, even if they do not request it, as well as for payments made to them before the date of transaction of goods or provision of services;".

This fiscal framework also requires the VAT settlement of the value of the advance payment, at the applicable rate to services provided and/or goods transacted. After issuing the final invoice, you must issue a credit note for the amounts received in advance, in order to rectify payables and receivables.

Note: On the credit note and on the final invoice, you must reference the corresponding advance payment invoice.

Advance payment process on Invoicing Engine

The advance payment process follows 3 steps:

1. Issuing the Advance Payment Invoice;
2. Issuing the Invoice with the total for the goods or services provided;
3. Issuing the Credit Note 

Let's consider the following example:

Saving invoices in a foreign currency

To adjust the company invoicing to the tax regional area of your customers, you can use different currencies when managing price lists and issuing documents.

To record an invoice in a foreign currency, follow these steps:

1. Access Invoices and click Create;
2. Identify the Customer;
   Note: If defined on the customer file, the currency will be automatically suggested when associating the Customer to the document, on the Financial area;
3. On the Financial area, change the document currency, if applicable;
   Note: If the currency is different from the base currency, the field Exchange Rate is filled in with the existing information on the system;
4. On the Goods and Services area, select the Itemsand specify the Quantity and the Unitary Price;
5. Click Save and Send.

Correcting automatically settled invoices

In cash purchases, a Cash Invoice is issued. This invoice is known as a automatically settled invoice because it is a type of document that does not generate an open item. If this customer returns the item, you must correct the purchase with a credit note.

By default, the Invoicing Engine has a document type named Automatically Settled Credit Note (NCA) that does not generate open items, and the payables and receivables are automatically settled.

To correct automatically settled invoices in the case of return or exchange, follow these steps:

Adding several types of exemption on the same invoice

When a company trades goods and services or has customers, suppliers and other entities with VAT exemption, it is mandatory to specify the exemption reason on the issued documents. The exemption reasons have been standardized by the Portuguese Tax Authority (AT), according to the current legislation.

This way, to communicate the sales documents to the AT you must ensure that, when issuing an invoice with VAT exemption, the VAT rate and the exemption reasons are correctly set up. It is possible to issue several exemption types on the same invoice, making it easier to associate an exemption reason to a specific item.

To streamline this process, you can define a default VAT Type in each item file. This way, when adding the item in an invoice, this VAT Type is filled in automatically.

To add more than one exemption type on the same invoice, follow these steps: