How to Handle Incorrect Invoices

PRACTICAL experience in guiding the handling of incorrect invoices in cases such as: incorrect date, unit name, tax code, address, goods price, tax amount, total amount… not yet delivered to the customer, delivered to the customer; not declared and declared Tax.

I. Incorrect Invoice but Not Declared Tax

1/ Invoice written incorrectly but not torn from the book

In case the invoice is written incorrectly, regardless of any criteria such as: date, company name, tax code, address, invoice content, total amount, tax rate, etc., simply cross out the invoice copies and issue a new invoice to replace it .

Example 1 : fdiinvietnam.com Consulting Services LLC issued an invoice to a customer on August 20, 2018, invoice number 0000001, the total value of the goods is 500,000 VND but it was written incorrectly as 800,000 VND. The solution is to cross out the copies, write the word cancel and issue a new invoice to replace invoice number 000001.

Illustration of how to handle incorrect invoices:

2/ Invoice written incorrectly but torn from the book but not yet delivered to the customer      

In case the invoice is written incorrectly, regardless of any criteria such as: date, company name, tax code, address, invoice content, total amount, tax rate, etc., just insert the incorrect invoice in the old position, cross out the invoice copies and issue a new invoice to replace it, but note that the new invoice must be issued on the same date as the incorrect invoice .

Example 2 : fdiinvietnam.com Consulting Services Company Limited issues an invoice to a customer on August 20, 2018, invoice number 0000001, the total value of the goods is 500,000 VND but is written incorrectly as 800,000 VND. The solution is to clip the incorrect invoice back to its original position, then we cross out the copies, write the word cancel and issue a new invoice to replace invoice number 000001. Note that the new replacement invoice must be issued on the same day as the incorrectly written invoice, which is August 20, 2018.          

Illustration of replacement invoice:

3/ Incorrectly written invoice delivered to customer but not declared

In case the invoice is written incorrectly, regardless of any criteria such as: date, company name, tax code, address, invoice content, total amount of goods, tax rate, etc., and has been delivered to the customer but the customer has not yet declared tax , the handling procedure when discovering errors on the invoice is as follows:

• Make a record of invoice recovery
• After receiving the minutes and the invoice, proceed to clip the torn invoice into the book and cross out the invoice copies. Note: you can attach the invoice withdrawal minutes to the same incorrect invoice for easy explanation later .
• Issue a new replacement invoice. The replacement invoice is issued on the date the error is discovered and the same date as the record of withdrawal of the incorrect invoice.

Example 3 : fdiinvietnam.com Consulting Services LLC issued an invoice to a customer on August 20, 2018, invoice number 0000001, but on August 25, 2018, the company discovered that the invoice had the wrong tax code of the customer. The handling is as follows:

– Make a record of invoice withdrawal on August 25, 2018.

Illustration of invoice recovery minutes:

– After receiving a copy of the invoice withdrawal record as above along with the previously issued incorrect invoice, we clip the incorrect invoice into the book and proceed to cross out the copies, write the word cancel. Note, you should clip the withdrawal record together with the incorrect invoice number to avoid loss and facilitate future explanation.

– Issue invoice number 0000002 to replace the incorrect invoice dated August 25, 2018 as stated in the withdrawal report.

II. Incorrect Invoice Was Delivered To Customer And Customer Declared Tax

1/ Incorrect invoices affect goods and tax payments

In case the invoice contains incorrect criteria: unit price, total amount, total amount of goods, tax rate, etc. (the incorrect content affects the amount of goods and tax), the invoice has been delivered to the customer and the customer has declared tax , the handling procedure when detecting errors on the invoice is as follows:

• Prepare an invoice adjustment report on the date the error is discovered.
• Issue an invoice to correct errors on the same day as the date of the adjustment report. Note: The adjustment invoice must clearly state the adjustment content such as: Adjusting the quantity of goods, total amount, or tax rate… for invoice number…, symbol, date…
• Declare adjusted invoice in current period

Example 4 : fdiinvietnam.com Consulting Services Company Limited issued an invoice to a customer on June 20, 2018, invoice number 0000037, symbol: AP/17P, form number 01GTGT3/002 with a total value of goods of VND 8,500,000 but was written incorrectly as VND 8,000,000 and the customer declared this incorrect invoice in the second quarter of 2018. On August 25, 2018, the company discovered a specific error, namely the wrong price of goods, so it had to issue an adjusted invoice to increase the amount by VND 500,000. The handling method is as follows:

– Prepare the invoice adjustment report on August 25, 2018, the date the error of invoice number 0000037 was discovered.

Illustration of invoice adjustment minutes:

– Create an error correction invoice number 0000080 as stated in the adjustment report. Note: The adjustment invoice must clearly state the adjustment content such as: Adjusting the increase in quantity of goods, total amount, or tax rate… for invoice number…, symbol…, date…

Illustration of adjustment invoice:

– Declare adjusted invoices in the current period, specifically Quarter 3/2018.

• For the seller (Company fdiinvietnam.com), declare in the column the value of goods sold increased by 500,000 VND, the tax amount column is 0.

For example : Total sales revenue and service provision in the third quarter of 2018 of fdiinvietnam.com company is 100,000,000 VND, then when declaring tax in the third quarter of 2018, the value of adjusted invoice number 0000037 will be added to this column. Sales revenue and service provision is 500,000 VND, then the total sales revenue and service provision after adjustment will increase to 100,500,000 VND. The tax amount column is not affected when adjusting the value to increase in money.

• For the buyer (Company ABC), the declaration in the column of purchased goods value increased by 500,000 VND, the tax amount column is 0.

For example :The total value of purchased goods in the third quarter of 2018 of ABC company is 200,000,000 VND. When declaring tax in the third quarter of 2018, the value of invoice number 0000037 will be added to this column. The value of purchased goods is 500,000 VND. The total value of purchased goods after adjustment will increase to 200,500,000 VND. The tax amount column is not affected when adjusting the value to increase in money.

Example 5 : fdiinvietnam.com Consulting Services Company Limited issued an invoice to a customer on June 21, 2018, invoice number 0000039, symbol: AP/17P, form number 01GTGT3/002 with a total value of goods of 9,000,000 VND but was written incorrectly as 9,500,000 VND and the customer declared this incorrect invoice in the second quarter of 2018. On August 28, 2018, the company discovered a specific error, namely the wrong price of goods, so it had to issue an adjusted invoice to reduce the amount by 500,000 VND. The handling method is as follows:

– Prepare the invoice adjustment report on August 28, 2018, the date the error of invoice number 0000039 was discovered.

Illustration of invoice adjustment minutes:

– Create an error correction invoice number 0000092 as stated in the adjustment report. Note: The adjustment invoice must clearly state the adjustment content such as: Adjustment to reduce the quantity of goods, total amount, or tax rate… for invoice number…, symbol… date…

– Declare adjusted invoices in the current period, specifically Quarter 3/2018.

• For the seller (Company fdiinvietnam.com), declare in the column the value of goods sold is reduced by 500,000 VND, the tax amount column is 0.

For example :Total sales revenue and service provision in the third quarter of 2018 of fdiinvietnam.com company is 100,000,000 VND, then when declaring tax in the third quarter of 2018, the value of adjusted invoice number 0000039 will be deducted from this column. Sales revenue and service provision is 500,000 VND, then the total sales revenue and service provision after adjustment is 99,500,000 VND. The tax amount column is not affected when adjusting the value to money.

• For the buyer (Company ABC), declare in the column the value of purchased goods reduced by 500,000 VND, the tax amount column is 0.

For example : The total value of purchased goods in the third quarter of 2018 of ABC company is 200,000,000 VND. When declaring tax for the third quarter of 2018, the value of invoice number 0000039 will be deducted from this column. The value of purchased goods is 500,000 VND, so the total value of purchased goods after adjustment is 199,500,000 VND. The tax amount column is not affected when adjusting the value to money.

2/ Incorrect invoice does not affect the goods and tax payment

In case the invoice contains incorrect criteria: date, name of unit, tax code, address, name of goods, unit of calculation, etc. (the incorrect content does not affect the goods and tax amount), the invoice has been delivered to the customer and the customer has made a tax declaration , then the procedure for handling errors on the invoice is as follows :

• Prepare an invoice adjustment report on the date the error is discovered.
• Issue an invoice to correct errors on the same day as the date of the adjustment report. Note: The adjustment invoice must clearly state the adjustment content such as: Adjustment of date, month, year, tax code, address, name of goods, unit of calculation… for invoice number…, symbol…, date…

Example 6 : On June 23, 2018, fdiinvietnam.com Consulting Services LLC issued an invoice to ABC company with invoice number 0000041, symbol: AP/17P, form number 01GTGT3/002. ABC company’s address is: 726 Nam Ky Khoi Nghia, Ward 4, District 3, Ho Chi Minh City, but the incorrect customer address is: 326 Nam Ky Khoi Nghia, Ward 4, District 3, Ho Chi Minh City, and the customer declared this incorrect invoice in the second quarter of 2018. On August 29, 2018, the company discovered the specific error of the customer’s address, the handling is as follows:

– Make a record of adjustment on the date of error discovery, August 29, 2018.

Illustration of invoice adjustment minutes:

Note :The invoice adjusts the contents such as: Adjusting the date, month, year, tax code, address, product name, unit of calculation… (incorrect content does not affect the product price and tax amount), the invoice has been delivered to the customer and the customer has made a tax declaration, then only need to keep the adjustment record and the adjustment invoice (if any) together with the incorrect invoice to avoid loss and facilitate future explanation.