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Invoice for sole proprietors in Ukraine without VAT: details of filling in

03.11.2023
Invoice for sole proprietors in Ukraine without VAT: details of filling in

For sole proprietors operating without VAT, maintaining accounting records is a very important step in business processes. One of the key documents in this regard is the invoice. But how to fill out this document correctly and what nuances should be taken into account? This article is intended to help sole proprietors understand all the intricacies of this process.

What is an invoice?

An invoice is a document that confirms the fact of the sale of goods or services. It reflects basic information about the seller, buyer, characteristics of the goods or services, their quantity, price, and amount to be paid.

Which fields of the invoice are mandatory in Ukraine?

An invoice should be as detailed and accurate as possible. Here are some of the main fields that need to be filled in

  • Document title: usually the word “Invoice”.
  • Date of issue: the date on which the document was created.
  • Invoice number: a unique number to identify the document in accounting.
  • Seller’s data: full name, EDRPOU, address, bank details.
  • Buyer’s data: the same information as for the seller.
  • List of goods/services: detailed description, unit of measurement, quantity, price per unit, total cost.

What are the most common mistakes made when filling out an invoice?

When filling out an invoice, it is important to avoid mistakes that can lead to unpleasant consequences in dealing with counterparties or regulatory authorities. Here are some of them

  • Incorrect date: This can lead to confusion in accounting.
  • Omission of mandatory fields: if you do not provide all the necessary information, the document may be invalidated.
  • Incorrect counterparty data: this can lead to problems with payments or during an audit.
  • Incorrect calculation of the amount: this can lead to disputes between you and the buyer.

Do I need to keep a copy of the invoice?

Yes, it is mandatory to keep a copy of the invoice. This makes it possible to prove the fact of the transaction in the future, and is also useful in case of an audit or inspection by regulatory authorities. It is recommended to keep copies for three years from the date of issue.

What should I do if I find an error after issuing an invoice in Ukraine?

If you find an error after the invoice has already been issued, it is recommended that you immediately draw up a new document with corrected data and send it to the buyer. It is important to explain to the buyer the reason for the replacement and ensure that the previous document is cancelled in the accounting records of both parties.

What are the differences between invoices for sole proprietorships and other businesses?

As previously mentioned, an invoice is a document confirming the sale of goods or services. However, it is important to understand that there may be some differences in the preparation of this document for sole proprietorships operating under the simplified taxation system and for companies operating under the general taxation system.

Firstly, for sole proprietors who have chosen the simplified taxation system, invoices may indicate either the single tax group or the tax percentage, especially if they are in the 3rd group of the single tax. This allows the counterparty to understand the specifics of cooperation with the sole proprietor and makes the process more transparent.

Secondly, an invoice for a sole proprietorship under the simplified taxation system may be more introductory in nature, serving as a commercial offer. Whereas for companies on the general taxation system, an invoice more often has a legal status and serves as the basis for accounting.

Therefore, when you cooperate with different types of businesses, it is important to pay attention to the details of invoices and take into account the peculiarities of cooperation with sole proprietors on the simplified taxation system.

Advantages and nuances of electronic signatures for sole proprietorships

In today’s world, where technology is becoming increasingly important in business processes, sole proprietors are also actively implementing electronic document management. However, as mentioned above, sole proprietorships do not have a separate electronic signature and sign documents using the signature of an individual

An electronic signature ensures the confidentiality, authenticity, and integrity of documents. It also facilitates the speed of document exchange between the parties, which greatly optimises business processes.

However, if you, as an individual entrepreneur, decide to use an electronic signature to send invoices, it is important to consider several points. First, you should make sure that you have the appropriate software to create and send electronic documents. Secondly, it is important to agree with your counterparty on the possibility of accepting electronic invoices to avoid misunderstandings.

To minimise the risks, it is recommended to conclude a separate agreement on the exchange of electronic documents or include the relevant clauses in the main cooperation agreement. In this way, both parties will be sure that the electronic document flow is correct and legal.

In conclusion, an invoice is one of the most important documents in business. Filling it out correctly and correcting errors in a timely manner will help you avoid problems with partners and regulatory authorities. Let your business grow without any unnecessary obstacles!