Sole trader invoicing

davil

Hi , I've registered a business name online with Company registrations office through www.cro.ie and I was wondering if there's anything else I need to do now. I won't be registering for VAT yet because I'm only doing the odd website and I won't be charging VAT for the mo. However, I'm unsure as to the next step, I have a website up and running and business cards and a small amount of advertising but I've got my first website job almost finished at this stage and we've agreed a fee - I was wondering how I should invoice the business? Should I literally setup a word document with my business name, address, phone number, an invoice number, like 50001 or something, a description of what was done, and a price???? Is there something else I'm missing. I really can't afford an accountant yet as I'm not making any money really. this will be my first sale. I want to do everything legit but I don't want to have to get in-depth with accounting packages or anything. I will be alright with backing up my invoices off-site etc. just in case but is there anything else I need to do?

Any help is much appreciated.

Mr Clonfadda

Hi Davil

yes just keep all your invoices in a file along with all you purchases and your bank statements.
Then hopefully in a few months you can afford to get a bookkeeper or accountant to help you do your accounts either on accounts package or excel. You don't necessarily need to put such a high starting invoice number though. I once met a person in business who had been the first customer with two companies and had had been thrilled to get invoice no 001. Best of luck.

niceirishfella

You could do up a word doc as you say, for starters.
Why not download a simple piece of free software of the net to help you.

davil

What about "purchase order" numbers? do I need to use these? are they important? I not understand, me slow. :-D

niceirishfella

well, do you purchase much to do your job?

Mr Clonfadda

Purchase order numbers are used by big companies to ensure that they have actually ordered stuff. I presume you can order stuff and remember that you did!!:D

davil

Er no I won't forget but I meant the other company. will they need a P.O.?? probly not?

jerryob

OP, you mention that you won't be registering for VAT, since I'm guessing you'll not have the revenue to approach the 35k(?) threshold.
That's fair enough, but you might want to consider the following:
i) your clients might insist on dealing only with VAT registered suppliers, so that they can claim back the 21%. If your clients are not registered, then you don't have a problem. If, on the other hand, you send in a quote for a contract, and the client expects a VAT compliant quote, then you will be delayed until you get a VAT number - this delay could allow a competitor in, worst case.

ii) by registering for VAT you can, of course, claim VAT back on purchases. You might think that your purchases are low, but they mount up. Especially, if you want to purchase a laptop, software, on-site expenses, etc. and hopefully as your business grows.

If you do decide to register, then I would recommend registering on a moneys-received basis - much better for managing your cash flow...

Of course, my assumptions about your plans could be all wrong, but it's worth bringing them up.

davil

no Jerry I think you've hit the nail right on the head there. thanks for that. it's the most important advice I've had so far. I know the client personally, well she's not exactly the client but works for them so I can ask her if I need to be VAT compliant. I'll sort it out one way or another. This kinda makes sense now. thanks again.

Mr Clonfadda

Hi Davil

If company gives you a purchase order number, they would require that number on your invoice to them.

If you are not registered for VAT it will not matter to any business that you are not charging VAT as you won't of added anything to be reclaimed. i.e. you bill might be 200 euro rather than 200 euro + VAT ie 242 euro.

Lets not mix up "not being registered for Vat" and "not being VAT compliant". Two very different issues.

Your original post says you can't afford an accountant so see how business goes before registering for VAT. Hopefully you will do well and will have to register for VAT soon.

cheers

Ellechim

It might be worth you doing a 'start your own business course'. fas run them regularly and they cost about 150 for an eight week course. Well worth doing........will cover all this sort of stuff. plus legal stuff like intellectual property, etc....

conical

Highly recommend freshbooks.com for invoicing and accounts in general.
You can set it up with your own letterhead, and it generates pdf invoices very very easily. Also has time-tracking and logging, financial reports, expenses tallies etc.

You can only have 3 clients on your free account (but I get around that by entering client details as an item on the invoice rather than in the client field)