Invoicing — How to avoid 10 common mistakes

Invoices are not only a formal requirement, but essential for the correct documentation of services provided and the lawful processing of sales tax. However, small errors in invoicing can have serious consequences — from tax disadvantages to legal sanctions. Here you can find out which common mistakes there are when writing invoices and how you can avoid them. This saves you time and hassle and keeps track of your finances.

What is an invoice?

A bill is loud §14 Sales Tax Act:

“A document with which an entrepreneur accounts for deliveries and other services to the service recipient, regardless of what this document is called in business transactions (e.g. information in a contract). A credit note also counts as an invoice if it meets the formal requirements and the providing contractor does not object to the content of the credit note.”

In the digital age, it is common to send invoices via PDF. However, the legislator does not regard a PDF document as a genuine one e-bill On — this requires more specific formats such as XRechnung or ZUGFeRD 2.1 necessary, which enable further electronic processing — for intra-German B2B businesses, the new e-Billing Regulation In force.

The 10 most common mistakes when writing invoices and their consequences

Spelling mistakes in name or address 🖋️

Incorrect spellings in the name or address of the customer or company are often unproblematic as long as they do not falsify the content. As a rule, the input tax deduction is retained, but major mistakes can leave the impression of lack of care and generate unnecessary inquiries from customers.

Incomplete mandatory information 📜

Is essential information such as name and address, tax number or sales tax ID missing, Invoice number And the payment date, this can lead to problems when deducting input tax. In such a case, the invoice issuer must issue a correction and document and clearly supplement the required information.

Missing beneficiary 🔄

If the invoice recipient no longer exists, for example due to a business task, an adjustment is often not possible. This situation should be avoided by regularly updating customer data.

Wrong or missing tax number or VAT ID 🆔

Incorrect tax information such as the tax number or VAT ID number can affect input tax deduction, provided that the error is apparent to the invoice recipient. However, if the information is correct, the input tax deduction usually persists.

Unauthorized tax ID 🚫

If a tax is shown on the invoice even though the issuer is not obliged to pay sales tax (e.g. in the case of small business owners), the exhibitor owes the tax amount shown to the tax office. Correction is possible, but only by agreement with the tax office and the parties involved.

Higher or lower tax amount 💸

If the tax is set too high, the excess amount must be paid to the tax office; however, the customer may only deduct the correct tax amount as input tax. In the opposite case, the invoice recipient owes the difference — this requires particular care when calculating tax.

No reference to the transfer of tax liability ➡️

For certain services, it must be stated that the tax liability is transferred to the customer (e.g. for cross-border services). If this notice is missing, the service provider owes the tax, which can lead to unexpected tax burdens.

Missing information about the time of delivery or the service description 📅

The date of service provision and a detailed description of the service provided or delivered goods are mandatory information. If forgotten, this information can also be added later by the recipient without consultation, which prevents misunderstandings.

Unclear identity of the provider 🕵️

Inconsistencies in the identity of the invoicing party, for example due to the use of false names or addresses, may result in a loss of input tax deduction. This applies in particular to invoices that are erroneously issued in the name of another person or company.

Incorrect correction by recipient ❗

Only the invoice issuer may correct the invoice. An undue correction by the recipient — even with the issuer's consent — is not legally compliant and may result in tax disadvantages. In the event of errors, it is always necessary to ask the exhibitor to correct them.

Invoice error correction: What is allowed?

Incorrect invoices may be corrected, provided that the recipient and issuer agree. An overstated tax amount must still be paid to the tax office, and the recipient may only deduct the correct amount as input tax. Freelancers and small business owners who report a tax even though they have not opted for sales tax also owe this amount to the tax office.

For special cases such as billing in someone else's name (e.g. travel agents), the tax data of the original provider must be integrated into the invoice.

Voluntary Information on Invoices: More Clarity and Convenience for Customers

In addition to the mandatory information, Invoices may also contain voluntary information that is helpful to the customer:

• Contact details: Telephone number or email to answer open questions
• Bank account: IBAN for direct transfer
• Payment terms: Provide the due date or a discount for early payments

This additional information contributes to a transparent and customer-friendly invoicing process and helps to speed up payment receipt.

Deadlines for Invoicing: Legal Requirements for Entrepreneurs

The following applies to entrepreneurs: Invoices must be issued no later than six months after the service has been provided, otherwise there is a risk of Fines of up to 5,000 euros Pursuant Section 26a (2) UStG. However, there are no binding deadlines for private individuals. Since Invoices influence a company's liquidity flow, it is recommended to create them immediately after the service has been provided in order to speed up receipt of payments.

Invoicing with ZEP: Efficient and Error-Free Processing

Invoicing is often time-consuming and prone to errors for companies, especially when it comes to manual processes. ZEP offers a comprehensive solution that simplifies, speeds up and adapts the entire invoicing process to the requirements of modern companies.

With ZEP, you benefit from automated, transparent and flexible Invoicing:

• Automatic invoicing: ZEP automatically generates invoices based on the entered Project times, which not only saves time but also minimizes manual errors. In this way, companies receive error-free and consistent invoicing that radiates efficiency and professionalism.
• Project specific information: All relevant project and customer-related data is recorded in detail in ZEP and made available for invoicing. This ensures accurate and comprehensible invoices that meet the individual requirements of each project and avoid misunderstandings.
• Flexibility when choosing formats: In addition to the classic PDF invoice, ZEP also supports E-invoicing formats Search as XRechnung and ZUGFeRD, which enable standardized and digitally optimized processing. ZEP thus meets legal requirements and at the same time offers easy adjustment to the specific needs of the customer.
• Integration with Accounting Systems: The integration In systems such as DATEV and Lexware, it facilitates the exchange between invoicing and accounting. These avoids duplicate entries and makes accounting more efficient and reliable.
• Freely definable additional fields: ZEP allows you to create user-defined fields, which are displayed on every invoice, depending on the project or customer. This increases flexibility and ensures that all relevant information is visible to the customer.
• Comprehensive evaluation options: ZEP provides detailed reports and overviews that create complete transparency about invoice items, outstanding items and sales forecasts. In this way, companies always maintain control of their finances and can plan their liquidity planning thanks to comprehensive Reporting features optimize.

This is how you make your invoicing efficient and thus promote transparency, flexibility and professionalism. From automated generation to detailed traceability, ZEP helps companies to securely manage their finances and accelerate payment receipt — a crucial basis for sustainable growth and successful customer relationships.

{{blog-cta}}

Conclusion

Professional invoicing requires compliance with legal requirements and the prevention of common errors that can have tax and legal consequences. Comprehensive software such as ZEP can help you optimize your billing processes, avoid manual errors and improve liquidity. This ensures you a professional presence and a stable financial position in the long term.