What is an Invoice? Types of Invoices

An invoice is one of the most important accounting documents, necessary for the operation of almost every business. Although this may not be the first time you encounter this topic, it is still worth taking a closer look at what an invoice is and what it means for entrepreneurs and consumers. Let's explain what this document is, what types of invoices exist, and what data entrepreneurs should pay attention to when issuing them.

What is an Invoice?

An invoice is an official accounting document that confirms the completion of a transaction between two business entities. It is not only proof of purchase, but also allows you to track income and expenses, and is necessary for proper tax accounting. According to Polish law, issuing an invoice is mandatory for most commercial transactions. An invoice contains information about the seller and buyer, the date of issue, document number, a description of the goods or services involved in the transaction (such as quantity, unit price, and total amount owed), and VAT information.

Why Are Invoices So Important?

Invoices play a key role in bookkeeping and ensuring proper tax accounting. They are necessary for tracking a company's finances and serve as proof of the transaction in case of a tax audit. Issuing invoices is mandatory for entrepreneurs and must be done within the required timeframe according to current regulations.

Data Required for Invoices

The following information is required to issue an invoice:

Seller's information, including the company name, address, and VAT number.

Buyer's information, including company name, address (or residential address for individuals), and VAT number (for sales to legal entities), possibly the PESEL number (for individuals — not required).

Invoice Date

Invoice number, which is a unique identifier for the document.

Description of the goods or services sold, their quantity, and unit price.

Total amount due for the goods or services sold.

If the sale includes VAT, the tax rate and amount of VAT must be indicated, as well as whether the price includes tax.

Types of Invoices

Depending on the nature of the transaction, several types of invoices can be distinguished, with the most commonly issued types being:

VAT Invoice

— a document issued for sales subject to VAT.

Proforma Invoice

— a document prepared before the transaction is completed, used to present an offer or estimate for goods or services.

Corrective Invoice

— a document used to correct errors in an invoice.

Advance Invoice

— a document issued when an advance payment is received for services or goods delivery.

Simplified Invoice

— a document issued for sales of goods or services that do not exceed a specific amount.

Export Invoice

— a document issued for the sale of goods or services outside the country.

It is important to know the types of invoices and understand when and for what transactions they should be used. This will help avoid errors in issuing invoices and ensure that our accounting complies with the applicable regulations. Always remember the importance of invoices for the proper functioning of your business.