As an entrepreneur, you are of course also concerned that an invoice can be created as quickly as possible for the sale of your products or the provision of your services. After all, there should be enough money in the till. But you cannot always create an invoice promptly, for example for longer projects. In this case, however, you have the option of sending your customer a partial invoice .
What is a partial invoice?
According to topbbacolleges, partial invoice is a term that is used colloquially. It is more correct to speak of a partial final calculation here . The partial invoice is a properly executed invoice for one or more services. It is important for the partial invoice that you have already performed these services. For your balance sheet accounting , the partial invoice is nothing more than a complete final invoice . This means that you have to comply with certain warranty obligations even with a partial invoice.
When is a partial invoice worthwhile for you?
With a partial invoice or partial final invoice, you always bring a completed part of a fairly extensive service or an extensive delivery to the account. So it is definitely worthwhile so that you don’t have to wait so long for your money, especially for larger payments.
- Partial billing is worthwhile for longer or larger services that you provide over a longer period of time
- A partial final invoice is worthwhile for you if you have larger deliveries of goods that take place at certain partial intervals
Of course, you have to make sure that the partial invoices are no longer taken into account in the final invoice . It is also important for you that you always agree a partial invoice with the customer in advance.
The difference between a partial invoice and a partial invoice
You must not confuse a partial invoice with an advance invoice (also called a down payment invoice). A partial invoice will only be issued if you want to invoice services that have already been performed. You can submit this partial invoice for a single item, but also for several individual items. The partial calculation has the same consequences as you know from the final calculation. It is important for you to pay particular attention to the warranty obligations.
The difference is the advance invoice. You will find these very often in the construction industry. In the partial invoice, a certain percentage of the total amount is always invoiced. This means that the partial invoice takes place before the service is provided. However, this also has the consequence that the deadline for a possible assertion of warranty obligations is not yet running. The period only begins to run when the services provided have been accepted. You can also use an advance invoice sample or a down payment invoice sample as an aid .
How do you have to look at the partial invoice from a tax point of view?
Just as the meaning of the partial invoice differs from the partial invoice, you also have to consider the different tax differences and post a partial invoice accordingly . In principle, it applies to you that you are always obliged to pay sales tax . This applies after the end of the registration period in which you also provided your service. The regulation applies to both the partial invoice and your final invoice. If, on the other hand, you create an advance invoice, then the sales tax is already due for the pre-registration period if you have received the invoice amount and not only after the service has been provided.
Create a final invoice based on partial invoices
Let’s assume you issue several partial invoices for the provision of your services . Everything has been agreed with the customer and he has paid on time. Depending on the level of performance, the total invoice amount will always be shown by you. All partial invoices that have already been paid will be subtracted from the accumulated sum. This means that you show the sales tax and the exact performance level on each of your partial invoices. But what do you do now if, for example, there is no further service after the fourth partial invoice? Then you need to do the following.
- You need a document that represents a correction of the last partial invoice and that you provide with the final invoice.
- Alternatively, you can create a separate final invoice in which you name all partial invoices. In addition, you have to add up all the contributions paid and show the final amount of EUR 0 .
There is a legal reason for this. A partial invoice is always an estimate. However, you can only eliminate this estimate if you show either a final invoice for the difference or, as in our example, the final invoice with 0 euros.
Conclusion
Under no circumstances should you confuse a partial invoice with an advance invoice. Both are very different, also from a tax point of view. Creating a partial invoice is particularly useful for you if you are performing a service over a longer period of time. You must then take these partial invoices into account in your final invoice after the service has been fully provided.