Two Clients - one on self-billing invoices and the other on normal invoices

[zonkkk]

As in the title, I will have self-billing invoices from an agency and have normal invoices generated by me on an online accounting portal (Crunch) for another client. This may create a mess in terms of sequential invoice numbering for VAT purposes.

For self-billing invoices, I used to create my own 'invoice' in the system to match the self billing invoice, but stated clearly in the notes, that it was not an invoice and it was only for the purposes of making sure the accounting portal had up to date sales information. This was OK if you only have one client, but now these 'invoices' would mess up the sequential numbering of the invoices I issue myself.

I've asked the accountants, but until I hear back from them, was anyone here in the same type of situation? What did you do in the end?

[Fred Bloggs]

Probably not complying with any proper convention, but I used to prefix my invoice number with three or four letters signifying which agency or client the invoice was for. Like - ABC0001, ABC0002 then for another agent/client XYZ0001, XYZ0002 and so on.

[Lance]

Probably not complying with any proper convention, but I used to prefix my invoice number with three or four letters signifying which agency or client the invoice was for. Like - ABC0001, ABC0002 then for another agent/client XYZ0001, XYZ0002 and so on.

Yep.

Free Agent offers the option for project level invoice numbering so does it automatically.

[ladymuck]

So does the agency that issue the self-billing invoices use your invoice numbers and that's why there's a numbering issue?

I'm not getting how you raising your own internal invoice and then matching it to the agency issued invoice will mess any numbering up.

I always ignored agency self-billing invoices and just created my own in my accounts system to register the payments against but never sent to the agency. I kept the self-billing paperwork and just used it like a remittance advice.

No need to have overcomplicated things at all.

[Fred Bloggs]

So does the agency that issue the self-billing invoices use your invoice numbers and that's why there's a numbering issue?

I'm not getting how you raising your own internal invoice and then matching it to the agency issued invoice will mess any numbering up.

I always ignored agency self-billing invoices and just created my own in my accounts system to register the payments against but never sent to the agency. I kept the self-billing paperwork and just used it like a remittance advice.

No need to have overcomplicated things at all.

Indeed. I have always just filed away agent or client self invoices. Like you, keeping everything in my own system without my invoices ever being sent out. Keeps everything neat and tidy.

[zonkkk]

So does the agency that issue the self-billing invoices use your invoice numbers and that's why there's a numbering issue?

The issue arises, when I raise the 'non-invoice' in my system to balance out the books. That will be given a number (automatically).

No 1234 - Proper Invoice (sent to client)
No 1235 - non-invoice (raised for a self-billing invoice)
No 1236 - Proper Invoice (sent to client)

The sequential numbers sequence for real invoices is broken: 1234 followed by 1236 (because 1235 doesn't exist in the eyes of HMRC).

[ladymuck]

You're definitely overthinking it.

As mentioned above, lots of us raise internal invoices to cover self-billing work. I'm not aware of the concept of a non-invoice. What accounting software are you using that allows you to create an invoice for a sale but excludes it from VAT returns, as you're saying it's not being reported to HMRC?

[zonkkk]

I am using the Crunch online system.

I am calling a non-invoice the invoice raised to account for the self-billing invoice. That is not a real invoice - the self-billing invoice is. This is still given a number as if it was a real invoice.

The VAT figures that are being reported to HMRC are correct. But the 'real' invoice numbers the ones sent to the clients will not be sequential which goes against the HMRC rules for VAT invoices.

Again, not an issue of you only have one client. But if you have multiple clients one of which is using self-billing your numbering sequence will be messed up and this might be a problem in case of an investigation, as far as I understand.

[eek]

I am using the Crunch online system.

I am calling a non-invoice the invoice raised to account for the self-billing invoice. That is not a real invoice - the self-billing invoice is. This is still given a number as if it was a real invoice.

The VAT figures that are being reported to HMRC are correct. But the 'real' invoice numbers the ones sent to the clients will not be sequential which goes against the HMRC rules for VAT invoices.

Again, not an issue of you only have one client. But if you have multiple clients one of which is using self-billing your numbering sequence will be messed up and this might be a problem in case of an investigation, as far as I understand.

Which is why I give every client a prefix and then use sequential numbers from there. Self billing is otherwise a world of pain for accountancy purposes.

[Lance]

I am using the Crunch online system.

I am calling a non-invoice the invoice raised to account for the self-billing invoice. That is not a real invoice - the self-billing invoice is. This is still given a number as if it was a real invoice.

The VAT figures that are being reported to HMRC are correct. But the 'real' invoice numbers the ones sent to the clients will not be sequential which goes against the HMRC rules for VAT invoices.

Again, not an issue of you only have one client. But if you have multiple clients one of which is using self-billing your numbering sequence will be messed up and this might be a problem in case of an investigation, as far as I understand.

as LM says, you are over-thinking it.
Your invoices aren't non-invoices. You are just not sending them to the agency as it confuses them. They correlate with the self-billing invoices, but the fact of self-billing does not make your invoices null.
If the agency refused to pay you, your invoices would be sent to them and be a matter of evidence as they are legal documents.

But using a different numbering sequence also works (AAA123456 for client A and BBB123456 for client B).