# Pay before invoice?



## AlbacoreA (22 Jan 2011)

Someone said to be, they had a company insisting on payment before a invoice would be sent. I've never heard of this. Why would a company do this? On checking the person doesn't seem to have received any invoices in the past for money paid either. it wasn't noticed till they checked after this issue arose.


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## allthedoyles (22 Jan 2011)

Some companies accept a pro-forma invoice in order to speed up the payment process .

There are few companies prepared to pay  without some form of written agreement .


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## AlbacoreA (22 Jan 2011)

They don't want to pay without an invoice of some kind. The odd thing is that this invoice is much, much smaller than the the one that was already paid, so its not like theres a risk that it won't be paid.


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## BazFitz (23 Jan 2011)

AlbacoreA said:


> Someone said to be, they had a company insisting on payment before a invoice would be sent. I've never heard of this. Why would a company do this? On checking the person doesn't seem to have received any invoices in the past for money paid either. it wasn't noticed till they checked after this issue arose.


 
It sounds like a VAT angle.  If the company is using the accruals basis, it has to pay over the VAT when it issues its invoices (subject to my comments below).  If its customers don't pay on time, there's a double whammy as the company hasn't been paid and has to cough up the VAT to Revenue.  By looking for payment before issuing the invoice, that risk is eliminated.  In reality, the VAT liability is triggered when the service has been provided (rather than when a piece of paper is issued).  Having said that, the fact that no invoice was ever issued in relation to previous services suggests simple VAT/general tax fraud.


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## AlbacoreA (7 Feb 2011)

Why do they not need to be audited or pay tax on them?


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## T McGibney (7 Feb 2011)

maria.rose said:


> Big companies sometimes prefer this method. Simply because these items that they sell need not to be audited as a sale for their company. Thus, they don't need to pay for tax on those sales.



How can their sales and VAT returns be audited without a comparison to cash receipts?


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## peelabee (7 Feb 2011)

I have received a number of pro-forma invoices from an architect, with a note on them saying "vat invoice will be issued when payment received".  I have paid the amounts due but have not received any further paperwork.  Does this have any implications for either the architect (small practice) or me (private individual)?


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## T McGibney (7 Feb 2011)

peelabee said:


> I have received a number of pro-forma invoices from an architect, with a note on them saying "vat invoice will be issued when payment received".  I have paid the amounts due but have not received any further paperwork.  Does this have any implications for either the architect (small practice) or me (private individual)?



Did you request an invoice?


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## peelabee (7 Feb 2011)

Hi T McGibney.  
After recieving and paying  3 pro forma invoices, I requested a receipt but all I got was photocopies of the original pro forma invoices (without 'received' being stamped or marked on them)!!  I didn't pursue it as I just thought he is a sloppy administrator.  Is there some reason for this, do you think?
Many thanks,
Peelabee


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