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Draft invoice should not be allocated invoice number
When an invoice is created, it's set to Draft until you send it.
Let's say I start building up an invoice, then leave it a few days to finish it later.
In between that, I issue more invoices. As far as I have seen, the draft invoice gets issued an invoice number, which means these other invoices will have out of order invoice numbers.
The problem is made worse if I decide that that draft invoice actually doesnt need to be sent and is deleted.
From what I understand, HMRC are pretty strict about invoice numbers being in date and consecutive order and should never have missing numbers in the sequence (for VAT registered businesses).
From HMRC web site:
"What if there is a break in sequence, for example where I cancel an invoice or it is spoiled and never issued to a customer?
As long as you retain the cancelled or spoiled invoice in your accounting records, or you can provide an explanation for the break in sequence, this is acceptable."
http://customs.hmrc.gov.uk/channelsPo...
Of course, the deleted invoice is not retained, FreeAgent just bins it.
I guess the solution is not to allocate an invoice number until the invoice is marked as Sent if one has not been generated already. Similar to the way recurring profiles work.
Matthew
Let's say I start building up an invoice, then leave it a few days to finish it later.
In between that, I issue more invoices. As far as I have seen, the draft invoice gets issued an invoice number, which means these other invoices will have out of order invoice numbers.
The problem is made worse if I decide that that draft invoice actually doesnt need to be sent and is deleted.
From what I understand, HMRC are pretty strict about invoice numbers being in date and consecutive order and should never have missing numbers in the sequence (for VAT registered businesses).
From HMRC web site:
"What if there is a break in sequence, for example where I cancel an invoice or it is spoiled and never issued to a customer?
As long as you retain the cancelled or spoiled invoice in your accounting records, or you can provide an explanation for the break in sequence, this is acceptable."
http://customs.hmrc.gov.uk/channelsPo...
Of course, the deleted invoice is not retained, FreeAgent just bins it.
I guess the solution is not to allocate an invoice number until the invoice is marked as Sent if one has not been generated already. Similar to the way recurring profiles work.
Matthew
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Inappropriate?Have thought this before... it's one thing stopping me from using recurring invoices and building invoices as I go along during a month. At moment everything is done on estimates and converted to an invoice when I send it. Not ideal really. -
Inappropriate?Hi both,
Matthew, my thinking is that, further to what HM Revenue say, so long as you don't actually delete the draft invoice (i.e. you have it in your FreeAgent system ready to show to a tax inspector), then that should be OK.
Do you agree, please?
Kind regards,
Emily -
Inappropriate?That would be a workaround, but not really a fix. What we really need is a cancelled status maybe?
Matthew -
Inappropriate?And it still doesn't address the issue of numbering sequences being in date order as well? But then I'm 100% sure if that is a strict HMRC requirement or not.
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Inappropriate?Hi Matthew,
HM Revenue don't actually mention whether the numbering should be in date order, so my thinking is that, as long as you have invoices with unique and sequential numbers (which you would do using FreeAgent), and you don't delete draft invoices so that you have proof of "missing" numbers to show a HM Revenue inspector, you should be fine.
How would you see a "cancelled" invoice as differing from the current "draft but not issued" invoice, please?
Kind regards,
Emily -
Inappropriate?To me a draft invoice is one that I'm currently working on, rather than one that I've decided not to issue - so I think they're two completely separate statuses too.
I always feel that the invoice numbers should be in order - so agree that I don't think the invoice should be given a number until it is taken out of draft.. -
Inappropriate?I think it would simply be a case of placing it under a status labelled appropriately. Perhaps it would be good to indicate the status 'CANCELLED' in red text when previewing the invoice / exporting to PDF.
That way we won't get confused between invoices we are building up and intend to send (i.e. drafts) and cancelled invoices. What do you think?
Whilst this would be the least effort to technically implement, I still think invoice numbers shouldn't be allocated until they are 'Sent'. That would be the overall best solution in my opinion.
Matthew1 Comment
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This solves the problem
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I've also found it frustrating that if I'm building an invoice, then expenses relating to it are all locked - so I can't edit them without first deleting the draft invoice. I'd rather the expenses were locked once the Invoice was listed as 'Sent'
Martin
EMPLOYEE
