In the vast majority of cases invoicing customers is a straight forward process. An order is placed, goods are supplied, made available or services provided and an invoice is raised for the services or goods provided. The date of the invoice would under normal circumstances always be dictated by the date physical supply takes place as HMRC guidelines state for VAT purposes.
A practice we will regularly come across when we speak to companies enquiring about OrderWise is an invoice being generated before goods have even been supplied. In nearly all cases this is down to the limitations of their existing system, often where an invoice ends up being used as the picking note. What happens however if when you go to pick an item only to find it is damaged, or not available? Having already raised the invoice it becomes a messy process of raising credits and making amendments which takes time and adds complications, all of which could be avoided by generating invoices following the confirmed supply quantities.
HMRC exceptions determine VAT invoice requirements
However, as is the case with many HMRC guidelines there are exceptions, situations arise where VAT invoices need to be raised before the supply of goods takes place such as where payment is taken but goods will not be supplied for a period of time specified by HMRC. These exceptions need to be taken into account by a minority of companies to ensure they meet their VAT and accounting obligations.
Business that fall within these exceptions will no doubt already be aware of HMRC guidelines. New development in the 2014 v9.3 release ensures these requirements can be catered for in an easier and simpler way within OrderWise by allowing invoices to be processed before despatch.
This ability is activated via General Customer System Settings and then controlled on a customer by customer basis against the customer’s invoicing settings. When invoicing before despatch is applied against a customer the invoicing amalgamation options available will automatically change to reflect this new invoicing ability. As invoicing before despatch requirements will be triggered by a payment being taken, a new Payment Received Flag is available in the Generate Invoice grid to easily identify when invoice generation should take place.
This new feature should only be utilised if absolutely required. Invoicing before despatch means that because stock has not been picked when the invoice is produced only estimated costs can be attributed to the items being invoice. This will mean accurate margins will not be available from invoices and sales orders would need to be used to ascertain this information. The obvious potential for changes to orders occurring after the invoice has been generated leading to credit notes and adjustments highlights the consideration that needs to be made prior to using this functionality.
To help manage invoices generated before despatch there have been 2 new standard reports add to the 2014 v9.3 release which you can read about here.
For more information on OrderWise Invoicing & Accounts integration watch our videos and download the brochure.
To discuss your requirements in more detail contact us today on 01522 704083.