What Distinguishes a Professional B2B Invoice

1. What are B2B invoices?
2. The benefits of B2B invoices
3. What does a B2B invoice need to contain?
4. What needs to be considered when invoicing in B2B?
5. What is the difference between B2B invoices and B2C invoices?
6. Which tools are suitable for creating B2B invoices?
7. E-Invoicing: The future of B2B invoices

Invoice issuance is an important aspect of all B2B companies. Find out here what a B2B invoice must contain and how it differs from a B2C invoice.

What are B2B invoices?

At the end of the sales process, B2B companies create invoices to request payment from customers. These documents contain the products or services provided, the associated costs, the due date, and the available payment methods. In most companies, B2B invoices are created at or immediately after delivery. Some use the mail, although most invoices are now sent by email or invoice software.

There are four main categories of B2B invoices:

1. Standard invoices: the most basic type of invoice used in the B2B sector.
2. Proforma invoices: A type of B2B invoice that is sent before the delivery of goods or services. Instead of a standard invoice demanding immediate payment, the proforma invoice informs customers what they have to pay after delivery.
3. Recurring invoices: These invoices are used for regular customers who purchase goods or services at a certain rhythm. Often this is in the context of a membership or subscription.
4. Commercial invoices: This invoice is quite complex as it includes customs value declarations for products crossing international borders. This includes the country of origin and freight costs.

The benefits of B2B invoices

Issuing B2B invoices not only ensures that you get paid on time. It also offers a number of other benefits for businesses, including:

• Effective inventory management: If your B2B business sells physical products, invoices are crucial for tracking inventory. They provide information about your stock and incoming orders. This allows you to create more accurate inventory forecasts and incorporate this information into your marketing strategies. An example of this would be promoting bestsellers to increase revenue.
• Organized accounting: Invoices are important for organizing your accounting. They ensure that you do not lose track of outstanding payments.
• Accurate analysis: Your invoices provide insights into budgeting and data for business planning and development. This way, you can predict future cash flows and budget for your new investments.
• Legal protection: Invoices help protect businesses from unjustified lawsuits as they provide details about the services provided and the date of delivery. If signed, invoices can also serve as legally binding agreements.

What does a B2B invoice need to contain?

A B2B invoice consists of several elements. Below you find the mandatory information of a B2B invoice:

• Invoice number or invoice ID: This is a unique identification number that belongs to each invoice. It serves as a reference for the payment you have received from the buyers.
• Seller information: Make sure you provide your company name, address and contact details (phone number and email address) in case customers have questions. You must also include your VAT identification number in your B2B invoice if you are acting as a VAT-liable entrepreneur. If you are exempt from tax, you must note this on your invoice.
• Name and address of the customer: The name and address of the buyer are standard entries on all B2B invoices. The information is also important for customers who want to claim tax refunds.
• Description of goods and services: Your invoices must contain a clear and accurate description of the goods or services you have delivered. Each product, service, and item, as well as their respective costs, must appear on separate lines.
• Invoice date: This is the date when the invoice was created and sent to the customers.
• Date of delivery: This is the date when the products or services were delivered. Although the delivery date and the invoice date may be different, they are usually within 30 days of each other.
• Total amount: This includes the sum of all goods or services listed on the invoice as well as the tax rates and the tax amount.
• Payment terms: This indicates when the payment should be received by you. Furthermore, you can state which payment method you prefer: check, ACH, wire transfer, or credit card.

What needs to be considered when invoicing in B2B?

Apart from the mandatory information mentioned above, you should consider the following points when issuing a B2B invoice:

• B2B invoices must be written in a 'living language'. Therefore, the tax office may request a translation for non-German invoices.
• You can send your B2B invoice by mail or even electronically if you have the consent of the recipients. In both cases, you do not need to sign the invoice.
• If you have provided your services abroad, the tax law there applies.
• Make sure you provide your VAT identification number and the calculated tax amount.
• If you have agreed with your customers on payment on account or installment payment, the conditions must also appear in the invoice.
• You must keep your B2B invoices for up to 10 years.

What is the difference between B2B invoices and B2C invoices?

The distinction between B2B and B2C is based on the purchase intent and purpose of use. B2C companies aim to sell products to end consumers. B2B companies, on the other hand, sell products or services to another company. For this reason, B2C transactions are subject to civil law, while B2B transactions are subject to commercial law. This results in certain legal peculiarities in the process of invoicing for B2B companies.

In a B2C invoice, for example, customers receive a gross invoice with the total amount of the goods purchased. Although the VAT is shown, all other additional costs are already included in the gross price. In the B2B sector, the invoice shows the net value for each individual product (without VAT). At the end of the invoice, the VAT is then added to the total net amount. This allows your customers to claim the VAT paid as input tax in their tax return.

Which tools are suitable for creating B2B invoices?

To avoid mistakes in invoicing, most B2B companies rely on a digital invoice management. In this case, the creation, sending, receipt, and processing of invoices is done electronically. This eliminates the need for your employees to deal with extensive paperwork - from invoice creation and editing to dispatch and tracking of payments. Moreover, your customers can easily and securely access their invoices online.

The following invoice programs are among the best currently available on the B2B market:

orgaMAX Buchhaltung

Lexware Office

FastBill

GetMyInvoices.com

Zervant by Ageras

finway

easybill

elopage

To make it easier for you to choose your invoicing software, you can download our OMR briefing on digital accounting and invoice programs.

E-Invoicing: The future of B2B invoices

A B2B invoice is a document that lists the products delivered to customers or services provided, along with their pricing. Complete and accurate invoices promote timely payments and minimize the risk of disputes. This way you can retain regular customers and ensure a steady cash flow - and ultimately expand your business. However, B2B invoice issuance is more complex than B2C. There are many things to consider, including taxes and different payment terms.

To simplify the process, you can use invoice programs as described above. They not only ensure that your invoices are correct. They also save you the manual work needed to create and send invoices. And considering that Germany wants to enforce electronic invoicing for B2B sales transactions by 2025, you are already prepared for the future with these solutions.