The tax invoice template is an important tool for any business to keep track of taxable amounts during the financial year. It is also used to understand how you will deduct tax from your customers and how it will be deposited into a government account. Whereas, tax amounts are known as monetary charges imposed by the taxation law of a country or state. Basically, there are two famous types of taxes which every individual needs to understand, like sales tax and income tax. As far as income tax is concerned, it is levied on the earnings of a business or an individual. Whereas, sales tax is levied on those goods and services which are sold during a financial year. To charge sales tax on the item sold, each business is required to maintain proper books of accounts for tax purposes. A tax invoice template includes a basic description of the area where you can insert details about the transaction. Apart from description, there are other columns for date, name of parties involved in a transaction, amount, mode of payment and signature of all concerned parties.
How to Fill a Tax Invoice?
Here are some instructions to fill out a tax invoice:
• You will have to allot an invoice number according to the database. Numbers can automatically appear if a template is designed with an initial number such as 0001.
• Next is, fill out the transaction reference section of the invoice with,
o Account name or number.
o Item purchased.
o Date of purchase.
• If a tax invoice is prepared for payments received, you can add terms (days), due date of payment and description of the purchase transaction.
• There is a specific column provided where complete customer’s information can be inserted. It is given in the table as the “Issued To” section of the tax invoice. This information includes:
o Business name.
o Contact information.
o Business telephone and fax number.
o Customer’s business and email address.
• If items are to be shipped in response to an online purchase or a phone order, fill in the shipper’s complete information.
• In the table, enter information including:
o Detailed description of item purchased.
o Quantity/unit type.
o Price per unit.
o Discount (if any).
• Fill in this information as many times as there are any purchases. There are certain templates that will calculate the net amount, total tax and grand total automatically with the help of formulas. Apart from these sections, there are other sections with the names of “amount paid” and “amount due”.
• You should provide complete bank information of customers who want to pay via bank. You can put this information at the bottom of the invoice. You should also fill in information if customers choose to pay with credit cards.
• Record payment with complete payment history including date and amount. It is important to judge the payment patterns of customers. It will help you find out who paid in a timely manner and who didn’t.
You need to download a tax invoice template and fill in blanks with required information according to the instructions mentioned above. After filling in blanks with the required information, you can not only save the invoice but also can get a print of it. Usually, the paper copy of this invoice is handed over to your customer. It is important to understand that you should not mix a regular sales invoice with a tax invoice. This is because the regular sales invoice is used to record only purchases, not the tax on purchase.
