Information to Be Provided on an Invoice

Proper and accurate invoicing gives the impression of a well-managed company and improves the company’s reputation. Currently, a company can manage its invoicing in various ways. Invoicing can be done by the company itself, or it may be outsourced. Invoicing routines also include follow-up of the accrued payments.

An invoice does not replace a contract. Matters, which have not been agreed in a contract, cannot be made binding on the other party merely by stating them on an invoice. For example, late payment interest deviating from the provisions of the Interest Act is a typical term that is often sought to be included in the contract through inclusion on the invoice.

The payer must be clearly identified and the invoice must be addressed using the recipient company’s official name. The invoice must be sent to the correct address, i.e. the correct billing address must be established. Subject to the recipient’s consent, the invoice may also be sent out electronically.

The invoice must clearly set out its subject matter, the contract or delivery the invoice relates to, and the relevant installment or time period (grounds for the invoice). The amount payable must be set out clearly and unambiguously. The invoice must mention the amount in euros, and the due date formatted as ”dd.mm.yyyy”. In such case, the debtor cannot claim that it did not know why, when and how much should have been paid. The invoice must also contain the details of the seller. It must specify the seller’s name, business ID (BIS), contact details and bank account information, along with a running reference number or an index number.

The invoice should also include a mention of the late payment interest. In consumer contracts, the applicable late payment interest is determined in accordance with the Interest Act. The reference rate used in the determination of the late payment interest is set by the Bank of Finland, based on the applicable interest level of the European Central Bank, and announced on the Bank’s internet site. Such reference rate is effective for six-months at a time. The late payment interest rate is the reference rate plus 7%, as provided in the Interest Rates Act.

Higher rates of late payment interest can be applied to trade between undertakings, subject to an agreement to this effect. In the absence of such agreement, the late payment interest may not exceed the rates according to the Interest Act. Often, the interest rate can also be based on an established trade custom. If a higher interest rate has been agreed, the invoice should mention the applicable percentage rate of interest.

If the seller is subject to value added tax (VAT), the invoice must itemize the applicable VAT, in addition to the total amount. The invoice must set out the VAT rate for the goods or services, and the total amount of tax. If the seller is not entered into the VAT register, the invoice cannot mention the amount of tax or the tax rate.