The global invoicing market is predicted to process 550 billion invoices every year. The expectation is that the size will quadruple by 2035.
In 2019, around 55 billion invoices have been prepared in a paperless format. The estimation is that the global electronic invoicing size will reach Euro 4.3 billion, and it will peak at an approximate amount worth Eur 18 billion by 2025.
Japan Invoice System
The Invoicing System in Japan is known as a ‘Qualified Invoice Preservation Method. It is stated in the Consumption Tax Law. Qualified Invoice or QI meets the tax requirement, which is indicated in the CTL.
It is released to business owners who have officially registered with the Tax Institute as Registered Business Operators (RBOs).
Their registration is not automatic, even if the business is filing for tax. The tax body approves the registration. Only taxable BO can register. The exempted business operator cannot register. It has to make a tax election to be a taxable business operator to register.
Types of Invoice
1. Pro forma invoice
It is not utilized to request for money. It is more or less like a pre-invoice that a service provider sends before the completion of a job for a client. The client can see his or her bill once the product has been delivered or services performed. As a Japanese business operator, you can use it to value gift items.
In most cases, it estimates the product’s value and the cost of each product. Nevertheless, you can change the terms and conditions in the invoice as the project continues.
2. Interim Invoice
This type of invoice specifies the worth of a more significant project into different layers. A business operator can send it as the project progresses.
A larger project usually requires additional labor, material, as well as operating expenses. Entrepreneurs can easily manage their cash flow when they have large jobs instead of waiting for project completion before receiving payment. The money can be used to cover the implementation of the project.
3. Final Invoice
More like the name, you send it after you have completed the project. The client can see the work that has been accomplished. In comparison to pro forma invoices, you use it to request for the fund. It usually incorporates the list of items and solutions provided. It also covers aggregate cost, due to the time frame, as well as the payment methods.
The best way to maintain a positive cashflow is to always send a final invoice as soon as possible through email or other online platforms.
4. Past due invoices
In some cases, your clients forgot to pay by the expected date stated on the final invoice. In this situation, what you send to them is called a past due invoice. You can add any late payment charges or interest to penalize clients who failed to pay before or on the due date.
If sending a past due invoice does not generate the expected result, you can employ a different strategy to facilitate payment. These may include establishing a payment plan, making an adjustment on the terms and conditions for payment, or subcontracting a collection agency.
5. Recurring invoice
They are utilized to bill clients for recurring services. You bill the same amount periodically, just like in utility bills.
It also works well in subscription-based ventures. You can utilize them if your clients or members pay a subscription to your website or company. For instance, if you own a web hosting platform with yearly subscription, recurring invoices are your best option.
6. Credit Memo
A credit memo is utilized in the place of billing a client. It is useful in the acknowledgment of a debt owed. It is more or less the equivalent of the amount on the initial invoice. It can be utilized when clients returned products, or goods were damaged in transit. It is useful for refunding the client who has paid.