How to set up a fee request correctly: Step-by-step guide to the rules

Have you ever run after your money after finishing your work?

The invoice request form provides exactly that solution. This document allows you to request payment for the ordered product or service in advance, before you complete the work. It also helps you minimize your outstanding debts and the risk of VAT liabilities.

The fee request is not actually an invoice, so it does not need to be recorded in the accounts and has no tax implications.

In this guide, we will show you step by step how to issue an invoice correctly. We will explain the rules for invoicing, the accounting process, and how to issue an invoice correctly after invoicing. Let's get started!

What is a fee request and when to use it

A pro forma invoice is essentially a document that you issue to request payment in advance for the price of a product or service you have ordered. Although it may resemble an invoice in appearance and content, it is not considered an official invoice and cannot be used as a tax document.

This document is unique in terms of the rules governing fee collection. It does not give rise to any tax liability, including tax assessment, tax return or VAT payment obligations. Consequently, it does not need to be recorded in the fee collector's accounts, as it is not included in the accounts. It does not need to be submitted to the NAV Online Invoice system either.

The buyer is not obliged to fulfill the payment obligation. Non-payment does not constitute a breach of contract and has no legal consequences. However, if the buyer pays the amount based on the invoice, this has legal effect. In domestic e-commerce, for example, the amount paid constitutes the sales contract itself.

Use the payment request when providing high-value products or services, as it allows you to minimize financial risk. It is also beneficial when working with new customers, as you do not yet have any experience with their payment habits. Furthermore, it can also be used if you want to finance the production of the product or the provision of the service in advance.

How to set up a fee request step by step

First, choose the tool you want to use to create the invoice. Most invoicing programs have this feature, but you can also create it yourself in a text editor.

When issuing the invoice, enter the details of the issuing company: name, address, tax number. Then record the buyer's details, including their name, address, and, in the case of a company, their tax number. Write down the exact name of the product or service so that it is clear what the invoice relates to.

Indicate the amount payable, usually as an advance payment. The receipt must include the date of issue, the payment deadline, and the invoice number. Important note: since the invoice is not a bill, it typically does not include a VAT code or the date of fulfillment.

Add the payment terms, such as the bank account number required for bank transfers. Be sure to indicate on the document that it is a fee request, not an invoice.

Once you have completed it, send the quote in PDF format to the customer by email. Once you have received payment, you can issue the official invoice.

Invoicing and accounting after fee collection

Upon receipt of the money, you must immediately issue an official invoice for the amount received. This can be a pro forma invoice if performance takes place later, or a final invoice if the fee request covered the full purchase price.

Issue an advance invoice if actual performance has not yet taken place, but your customer has already paid an advance. The performance date of the advance invoice will be the date on which you received the advance payment. It is important to note that, pursuant to Section 59 of the VAT Act, the date of receipt of the advance payment is the date on which the tax liability arises. Consequently, when you issue the advance invoice, you are already liable to pay VAT, even if performance will only take place at a later date.

You must submit the advance invoice to the NAV Online Invoice system. Unlike the fee request, this is a strictly accountable document that must be recorded in the accounts.

The final invoice to be issued upon actual performance shall include the total consideration and the deduction of the advance payment. The final invoice must indicate the advance invoice to ensure transparency. If several advance invoices have been issued, the final invoice shall include the consideration determined by the parties and the advance payments received with a negative sign.

Conclusion

You now have all the information you need to issue a correct invoice and prepare an invoice after the invoice has been issued. Essentially, this tool allows you to minimize financial risk while protecting the interests of your business.

Feel free to use the fee request form for high-value projects and new clients. Remember that it is not necessary to keep records of fee requests, but you must issue an official invoice immediately after receiving payment. This ensures proper administration and accurate fulfillment of tax obligations.