invoice bookeeping question

thetourist

hopefully this is the correct forum for this - if not maybe someone could redirect me

i have a few questions about invoicing . I have never had any education whatsoever in commerce or accounting, just what i have picked up - so apologies ....

how can i do an invoice/receipt system on computer for some transactions and on paper for others ?

is it ok for me to copy the receipt information from a duplicate book into the computer records so that all the records are in the one place ?

if i do this then would the duplicate book not be confusing things if i had an audit ? -- or would the nice revenue people understand - i mean is it standard practice

what is the standard practice or practices -

i am puzzled about invoice numbers - how important are they - are they just for yourself only so that you can keep track of things or is it really important that all invoice numbers are accounted for and that there are no duplicates

thanks in advance ...

jayok

Hi thetourist,

You basically need to keep 4 day books for your business.

1. Sales Invoices Issued
2. Purchaseable Invoices
3. Debits Journals
4. Cash Receipts Book

I would recommend using either paper or the computer - pref the computer - but whatever suits you.

Record the following details in each book

1. Sales Invoices Issued: Date, Person Invoiced, Total (incl VAT), Net of VAT (no vat), VAT and A final box for the receipt

2. Purchaseable Invoices: Date, Invoice From, Total (incl VAT), Net of VAT (no vat), VAT and a final box for payment

3. Debits Journal: Date, Payment to, Amount

4. Cash Receipts: Date, Received From, Total (incl VAT), Net of VAT (no vat), VAT


This looks more complicated that it is but basically it will be sufficient to record all the necessary details for the revenue.

With regard to invoicing, you should use some numbering system, it's pretty much essential to keep track of what's going on, particularily when you are claiming VAT, you don't want to post twice. There's no requirement here, start a 1 and just keep going.

thetourist

I would recommend using either paper or the computer - pref the computer - but whatever suits you.

thanks so much for all that - yes i would rather have things on the computer myself - but i'm still lost as to how to issue a receipt to a customer who pays me when i'm not at my machine - i could always carry around a paper book with me and give them a receipt out of that; but then i'd have 2 systems running concurrently - or i could copy the details from the book into the pc when i got back to it - but is that allowed - wouldnt that be 2 receipts ?
or are you actually telling me that it's basically one system or the other - and that i shouldnt mix

thanks again

jayok

If you are issuing receipts (or invoices) you can use "two" methods to issues them if you like. I mean you can hand-write an invoice using those lttle books you can buy with carbon copy sheets in them when you are away from your PC. If you are at your PC then there is no need to write them up.

As as suggestion why not use two different numbering systems depending on where the invoices were issued. i.e. start at P100 for the PC and B100 for the little book. Then when recording the invoices in your day books you can note which system they were issued from - there's no need to duplicate work.

pod

What's the difference between receipts and invoices?

thetourist

jayok wrote:

If you are issuing receipts (or invoices) you can use "two" methods to issues them if you like. I mean you can hand-write an invoice using those lttle books you can buy with carbon copy sheets in them when you are away from your PC. If you are at your PC then there is no need to write them up.

As as suggestion why not use two different numbering systems depending on where the invoices were issued. i.e. start at P100 for the PC and B100 for the little book. Then when recording the invoices in your day books you can note which system they were issued from - there's no need to duplicate work.

it's all starting to become clear and i think i get the picture; although i fear i must buy "accounting for dummies" if such a book exists - thanks so much for your help and suggestions - it really gives me a place to start

democrates

pod wrote:

What's the difference between receipts and invoices?

Think of an invoice like a bill for products/services supplied, whereas a receipt is an acknowledgement that payment has been made.

The origin of the word invoice from dictionary.com:

Alteration of obsolete invoyes, pl. of invoy, invoice, from French envoi, a sending, shipment, from envoyer, to send.

thetourist

democrates wrote:

Think of an invoice like a bill for products/services supplied, whereas a receipt is an acknowledgement that payment has been made.

The origin of the word invoice from dictionary.com:

but dont businesses sometimes send out an invoice for goods/services already paid for and isnt it the same as a receipt in this instance ( as long as it has paid written on the bottom of it ) - have been always confused about that

jayok

Well whatever about the formal definitions in practice a receipt is issued when cash is actually received. An invoice is issued as a "request" for payment.

Some people formally split the two however, often people just stamp an invoice as paid and use this as a receipt as it's equally valid.

thetourist

i have a few jobs in january and feburary that i didnt write out invoices for and now i dont have contact information for the clients so i cant send out the invoice - what should i do - should i just make entries in the daybook as if i had sent out the invoices, making up an invoice number to keep the thing consistent while in actual fact there was no invoice. or is it imperative that i contact the client to send them out an invoice if i have a record of it in the daybook - maybe i'm worrying about nothing, but i'd still like to know what i'm supposed to do

kluivert

thetourist wrote:

i have a few jobs in january and feburary that i didnt write out invoices for and now i dont have contact information for the clients so i cant send out the invoice - what should i do - should i just make entries in the daybook as if i had sent out the invoices, making up an invoice number to keep the thing consistent while in actual fact there was no invoice. or is it imperative that i contact the client to send them out an invoice if i have a record of it in the daybook - maybe i'm worrying about nothing, but i'd still like to know what i'm supposed to do

Yes you should have made entries in your day book and produce an invoice and save it on file. If the clients wants a copy of the invoice then you can send it to them.

You should keep a copy of all sales invoices that you raise and put into a folder. So one copy of the customer and one for you. This should be referenced to your sales day book. From these two pieces of information is what you need to calculate your Vat of Sales for your vat returns. If you fail to do this and the revenue inspect your records you could be in problem.

If you had a Vat Revenue Audit i would hate to see what type of fines or interest charges they would impose.

thetourist

If you had a Vat Revenue Audit i would hate to see what type of fines or interest charges they would impose

now i'm a bit scared so can i clarify?

are you saying that .....

As long as i keep a copy of the invoices myself then there's no need to send them to the customer unless the customer wants them ?

I have to keep a copy of the invoice myself even if the customer doesnt need one becuase the record in the daybook is not enough for revenue?

then with reguard to this part of the bookeeping (sales book and invoices) the above 2 records are all that i need to make - and if either one is left out then i am making a mistake ?

kluivert

thetourist wrote:

now i'm a bit scared so can i clarify?

are you saying that .....

As long as i keep a copy of the invoices myself then there's no need to send them to the customer unless the customer wants them ?

I have to keep a copy of the invoice myself even if the customer doesnt need one becuase the record in the daybook is not enough for revenue?

then with reguard to this part of the bookeeping (sales book and invoices) the above 2 records are all that i need to make - and if either one is left out then i am making a mistake ?

Everytime you invoice a customer make two copies, one for you and one for the customer.

Take your copy of the invoice raised and put it into a folder for save keeping. Maybe have a folder for each month. Then record this invoice in your sales day book. On the sales day book you should have a ref column, in this reference column you put in number of the invoice into it.

Personally i think its a good idea to have a paid column in your sales day book as well. So when receive payment for the invoice you write paid in the Paid column and the date of the payment. This will allow you to look through your Sales day book and see who still owes you money.

If you are not declaring all your sales in your vat returns and the revenue pick you to audit to make sure that you have all your records correct and up to date, then you could be hit with interest charges for failure to do so.

Dont worry about this too much, still applies to everyone.

If you need a hand PM me, ill be more than happy to give you a hand.

vector

if you find that your customers aren't paying you despite you sending them an invoice marked as 30 days then

-they wanted a "purchase order number" on the invoice
or
-they are waiting for you to send a something called a "statement" which is a summary of all the invoices you have sent them in a given period

thetourist

slightly different subject .......

if i take a cash payment - say €50 for a product - and write out a receipt and record the transaction; then, if i around the same time wish to withdraw €50 in cash from my bank account then do i have to lodge the €50 which i took as payment into the bank and then withdraw €50 as petty cash; or can i just take the €50 that i received as payment and use it as petty cash - and if so what way should i record it.... i would have thought in a withdrawals or petty cash book but dont these have to relate to a bank account.

basically i am asking if all transactions are meant to go through a bank account aswell as being recorded in the books or is it sufficient to just record them alone
thanks