Entrepreneurs and companies have to bill their clients, by sending out invoices or in some other way. There are some factors to take into account when sending out invoices, which we'll go over next.
Sending out invoices
The traditional way of billing is to send out an invoice of the work done or a commodity sold. Bills are part of everyday life and all of us have seen one. For example, many of us get an electric bill in paper or in electronic form. Invoice is a document that will include the information of what you are paying for, to who you are paying to and when you need to pay it. The necessary contents of an invoice is defined in the law and the list of definitions is long and comprehensive. If you plan on creating the invoices yourself, it's recommended to study this list. Billing and accounting services are of great help in this matter, since the entrepreneur doesn't have to create the bill from start to finish. It's really easy to create your bills with FREE! Entrepreneur and light entrepreneur service! New e-invoice law was enacted in april 2020, that is part of the EU e-invoice directive. This law gives the right to demand your invoices as electronic, when trading with other businesses. Therefore the only companies not obliged by this law are the companies that focus exclusively on consumer trade and small businesses with less than 10 000 euros revenue. The state and municipalities have not accepted other than e-invoices since 2019.
Some companies use payment terminals when selling products. These terminals are convenient when there are lots of small transactions and the sales happen face to face. Although an entrepreneur shouldn't acquire terminals for nothing, since the payment commissions can be a large expense. The entrepreneur is obliged to offer a receipt when goods are paid with a payment card or with cash in all industries (outdoor market sales is an exception).
When selling your own expertise, you should be careful when considering your invoice price. The invoice price is not equal to what someone would get as an equal employee, when doing the same job. Rule of thumb is that you can multiply the hourly wage by 1,25-1,30 and then add VAT to get your invoice price. When creating the invoice, you also need to consider expenses and side expenses that have resulted from the work. At the beginning of your business, a simple way to get your invoice price right is to calculate exact expenses, then add target profit. As an entrepreneur you should always ensure that your take-home pay is within expectations, and expenses like YEL insurance doesn't affect your salary too much. Your clients won't have employer's expenses, so it's possible to achieve a win-win situation. FREE! customer service will happily advise you, if you need help setting a correct invoice price for your work!
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