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Proforma Invoices / Payment notice - is this needed when using VAT? Thoughts, EU WISPs?

Hi all,

if you are using VAT (mostly EU WISPs), you might be interested in this feature request to implement Proforma Invoices:

https://community.ubnt.com/t5/UCRM-Feature-Requests/Proforma-Estimate-invoice-Recurring/idc-p/247286...

 

In a nutshell: the automatic recurring invoices will be replaced by Proforma Invoices, while the regular Invoices will be created once the client pays for the Proforma Invoice. This will prevent from paying the tax even from invoices which haven't been paid by the client.

 

Please upvote this request and share your thoughts and ideas.

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Re: Proforma Invoices / Payment notice - is this needed when using VAT? Thoughts, EU WISPs?

Seems this missing feature could be a deal breaker for (at least for EU WISPs), but no comments and no similar feature request from the community so far.

What do you think? Is this just a nice-to-have feature? How often do you pay a tax to state from an issued invoice not paid by a customer?
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Re: Proforma Invoices / Payment notice - is this needed when using VAT? Thoughts, EU WISPs?

The terminology is different, but it sounds like this is cash basis versus accrual.  Here in the US, the choice is generally determined on a company-wide basis.  IRS respects these decisions, but certain states impose their own requirements.  QuickBooks Pro (desktop) now includes an option on most of its reports that lets you choose the basis used for the report.

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Re: Proforma Invoices / Payment notice - is this needed when using VAT? Thoughts, EU WISPs?

@UBNT-Petr Having had a look at this - I personally think the way it is currently setup works fine. I am based in the UK/Scotland. 

 

My understanding and experience of a pro-forma invoice would be if a client was required to pay for the service or good upfront then a pro-forma invoice would be issued.

 

For example, we buy equipment from a variety of suppliers. Most suppliers we have credit agreements with so, we order the goods, once the goods are dispatched we are issued with a standard invoice and we have 30 days to pay the invoice. Regardless of whether we have paid the invoice straight away or on the 30th day, we can input the invoice into our accounting system and claim the VAT (regardless if we have paid or not). Now some of our more infrequent suppliers, we do not have credit agreements with. In this case, we place the order for goods and the supplier issues a pro-forma invoice before they ship the goods. Pro-forma invoice would be payable on receipt and only once the pro-forma invoice is paid in full, will the equipment be dispatched.

 

Hope this makes sense?  

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Re: Proforma Invoices / Payment notice - is this needed when using VAT? Thoughts, EU WISPs?

[ Edited ]

@wireless6262 wrote:

once the goods are dispatched we are issued with a standard invoice and we have 30 days to pay the invoice. Regardless of whether we have paid the invoice straight away or on the 30th day, we can input the invoice into our accounting system and claim the VAT (regardless if we have paid or not). 


Turn that around:  When you issue an invoice to a customer (regardless if they have paid or not) can the tax authority claim the VAT?

 

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Re: Proforma Invoices / Payment notice - is this needed when using VAT? Thoughts, EU WISPs?

@MimCom So I didn't know the answer and called my accountant to ask the question. 

 

It comes down to the type of particular VAT basis the company in questions has:

 

- Invoice basis = Tax due to Tax Authority once the invoice has been issued to the customer

- Cash basis = Tax due to Tax authority once the invoice has been paid by the customer

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Re: Proforma Invoices / Payment notice - is this needed when using VAT? Thoughts, EU WISPs?

Yes, this is what accountants refer to as cash basis versus accrual.

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Re: Proforma Invoices / Payment notice - is this needed when using VAT? Thoughts, EU WISPs?

1. What do you think? Is this just a nice-to-have feature? How often do you pay a tax to state from an issued invoice not paid by a customer?

 

It's good to have it as feature

It's not inusual tha i issue a invoice and the client pay it after months or don't pay it .. but this don't solve the problem with issued unpaid invoices

 

Also we need in italy credit notes of not paid invoices or invoice with not correct amount 

In this moment i work around with an issue of an negative invoice but this is not so correct...

 

Example

 

Invoice Nr 302 of 30eur ( i never take this money for several reason) i can't delete it o made it null so the only way is to compensate it with a credit note ("Nota di credito" in italy) but in ucrm i can't do it so i must issue an invoice with the amount in negative Invoice Nr 410 of -30eur ( but it's not the right way it's only a work around)

 

Thanks

 

 

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Re: Proforma Invoices / Payment notice - is this needed when using VAT? Thoughts, EU WISPs?

In a nutshell: the automatic recurring invoices will be replaced by Proforma Invoices, while the regular Invoices will be created once the client pays for the

 

Not replaced it let give the possibility to choose.



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Re: Proforma Invoices / Payment notice - is this needed when using VAT? Thoughts, EU WISPs?

The proforma can help in the future for another big problem with ucrm and the eurpean wisp

The  Electronic invoices  

 

In Italy 

Legislator has decided now to make B2B e-invoicing mandatory since July 2018. Two important deadlines have to be put in agenda:

  • 1 July 2018   B2B e-invoicing will become mandatory for companies engaged in petrol sales and for sub-contractors to suppliers in public procurement
  • 1 January 2019 B2B e-invoicing will become mandatory for all companies (B2B)

But i think also for other country in the next future the need to have right compilant eletronics invoices

 

 

 

 

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Re: Proforma Invoices / Payment notice - is this needed when using VAT? Thoughts, EU WISPs?

[ Edited ]

Thank you all for your thoughts.

@fastkom credit notes are also on the list. However, this might be of lower priority because this can be created manually (even in another tool) once this situation happens, but it's not possible for Pro-forma invoices which have no workaround and must be hard-coded in UCRM.

@fastkom what exactly should UCRM do to be compliant with the Electronic invoicing?

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Re: Proforma Invoices / Payment notice - is this needed when using VAT? Thoughts, EU WISPs?

We're in Europe and got burned when we first set up our accounting, we ended up paying a huge amount of tax on accounts that were set to recurring, some customers had left but our system kept generating invoices!!

We now use QuickBooks which allows us to generate recurring proforma's.

 

So most certainly needed for us Europeans, proforma recuirring, converted to invoice upon payment.

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Re: Proforma Invoices / Payment notice - is this needed when using VAT? Thoughts, EU WISPs?

[ Edited ]

And just to add to this, we are a pay as you go wisp, so we have many customers who holiday for 4 months or so, when they arrive they ask to get put on recurring, then forget to tell us they left and we can have a number of outstanding invoices for 1 customers, now times that by a high percentage for a wisp with 4000 customers, if you've created the invoice then you're paying the tax on it, that's EU legislation as far as I'm aware.

 

At the moment I have to keep Quickbooks going and will probably run it in tandem with my UCRM....but if UCRM could achieve Proforma recurrng invoices...then I wouldn't even need quickbooks!

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Re: Proforma Invoices / Payment notice - is this needed when using VAT? Thoughts, EU WISPs?

Thanks @fusionp that's helpful info
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Re: Proforma Invoices / Payment notice - is this needed when using VAT? Thoughts, EU WISPs?

From 1 January 2019 electronic invoicing will become an obligation for all VAT numbers in Italy .. maybe also for other eurpean nations ....

 

@fastkom what exactly should UCRM do to be compliant with the Electronic invoicing?

 

It must be Xml compiliant .. .   

i search for more detailed info to post it .....

 

 

 

 

 

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Re: Proforma Invoices / Payment notice - is this needed when using VAT? Thoughts, EU WISPs?

https://eeiplatform.com/19620/updates-e-invoicing-e-vat-eu-2018/

 

https://ec.europa.eu/growth/single-market/public-procurement/e-procurement/e-invoicing_en

 

Italy might be leading the charge but lools like it E-Invoicing is likely to be rolled out throught Europe.

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Re: Proforma Invoices / Payment notice - is this needed when using VAT? Thoughts, EU WISPs?

[ Edited ]

I think e-invoice is not an issue for UCRM.

 

From: https://eeiplatform.com/19620/updates-e-invoicing-e-vat-eu-2018/

> 2018 is a key year set by Directive 2014/55/EU, which requires mandatory use of this technology in public procurement processes

 

The e-invoicing becomes mandatory for governments in EU which must accept e-invoices (besides the regular invoices btw). This is not related to WISPs sending invoices to their customers, some kind of XML file will be useless for such a residential customer anyway.

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Re: Proforma Invoices / Payment notice - is this needed when using VAT? Thoughts, EU WISPs?

Proforma is normally used for something that you only want to deliver after payment is done.
Otherwise, when you deliver services or a product, you are obliged to make an invoice (even a 0€ invoice when you deliver for free) and when the payment is not done for some reason you should go to court eventually to receive payment.

If you decide not to go to court and choose to do some kind of 'commercial gesture' because you prefer the invoice not to be added to your income you would need to make a credit note and put that in your accountancy.

So in short: Proforma is not for services and products that are already delivered or that will be delivered. It is a document that says that it must be paid before delivery. And when payment does not come, no delivery will take place and no invoice is needed.

In my opinion, quotes can be used in UCRM instead of a proforma invoice.

Therefore, we do not really need it but it is useful when it would be added in UCRM.
Credit notes however are obligatory in EU and I would certainly prefer to see that being added sooner.

 

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Re: Proforma Invoices / Payment notice - is this needed when using VAT? Thoughts, EU WISPs?

Why not say from wich nations everbody are from ...perrhaps it's help the devoleper 

I'm from italy

 

@jma  Credit notes however are obligatory in EU and I would certainly prefer to see that being added sooner. 

Yes we use in italy it's help a lot 

 

@jma So in short: Proforma is not for services and products that are already delivered or that will be delivered. It is a document that says that it must be paid before delivery. And when payment does not come, no delivery will take place and no invoice is needed.

In my opinion, quotes can be used in UCRM instead of a proforma invoice.

 

No i think that help for services that will be delivered .. quotes can help for the first time not for recuiring services .. so i think it can be very helpfull .. i can have recurring invoices or/and recurring proforma if it will be devolep i use both .. 

 

 

 

 

 

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Re: Proforma Invoices / Payment notice - is this needed when using VAT? Thoughts, EU WISPs?

@UBNT-Petr The e-invoicing becomes mandatory for governments in EU which must accept e-invoices (besides the regular invoices btw). This is not related to WISPs sending invoices to their customers, some kind of XML file will be useless for such a residential customer anyway.

 

Not all customer are residential.. so a wisp company wich are private customer oriented can have a 5 or 10% or companies but a wisp oriented to business can have over a 30% of this type of clients

In italy the e-invoices will be obbligatory in 2019 for all this business company .. al companies with a vat number .. so all services that we sold as B2B need e-invoice... ( restaurant, hotels, bars, shops, small o big industry etc...)

 

I know it's very difficult to implement this and i don't say that ucrm must done e-invoice but it can help with the possibility to export more data with the invoices export tool .. 

First of all the possbility to export also the  CUSTOM ATTRIBUTE

so we can use this data inserted in custom attributes to try to import it in dedicated tools for create e-invoices...

Each comapny must have an uniqui id number for e-incoives ..  

 

 

 

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