Writing invoices is not rocket science, especially those who use templates or good software save a lot of time. But what legal requirements must the self-employed observe?

Invoicing for self-employed freelancers small business owners: legal requirements - 2 X 5 tips

Why is invoicing important?

If freelancers, traders, Company or even small business owners Performance have performed or sold a product, they naturally want the appropriate payment for it.

For that they need one on account write that must comply with very specific legal requirements, for example what information must be included. If the invoice is not created correctly, the Customer refuse to pay the bill. This leads to time-consuming correction loops and delayed payment. What is important when invoicing and must be included in the invoice?

What information should definitely be included on an invoice?

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Sending the invoice creates a claim against the customers. Depending on the type of taxation at the Value added tax – Actual or target taxation – at the same time there is a liability to the tax office (in the case of target taxation). In the case of actual taxation, this liability only arises when the customer has paid. The Choice Between target and actual taxation, sole proprietors, freelancers and small traders have their Turnover did not exceed EUR 500.000 in the previous calendar year. Companies that are required to keep accounts, such as OHG, GmbH or KG, and that have a turnover of less than 500.000 euros, can also apply for actual taxation.

Since invoices are official documents according to Section 14 of the Sales Tax Act, this paragraph also stipulates mandatory information that everyone must comply with when issuing an invoice. Each invoice must therefore contain the address of the sender and recipient of the invoice. In addition, each invoice is given a consecutive number and bears the date when it was issued. The tax number or identification number is also an important one Information on the bill. Furthermore, the invoice must contain precise information about the service provided or the products created and the time when the delivery was made or the service was provided. Finally, the invoice amount must be stated as a net amount and the invoice must contain the tax rate, the tax amount and the payment term. Finally, the invoice can be sent by post or online. The shipping method does not change the mandatory information on the invoice.

How should an invoice be formally structured?

Also, each invoice must be structured in a specific way, which looks like this:

  1. The letterhead usually contains information about the sender and the address of the recipient of the invoice. It is important to use the correct company name with the correct legal form designation. This is a common source of error that causes unnecessary correction loops and thus delays in payment. In addition, the date of the invoice, date or period of the service provision and the invoice number are in the upper invoice area.
  2. Above the next section should be the word Invoice. A small cover letter in which the sender thanks you or wishes the customer a lot of fun with the products is nice, but not a mandatory part.
  3. The following section contains the core of the invoice: the service description. Agents list here exactly what services they have provided and how high the fee is for this. All services are summed up in the invoice amount. It is important to show the invoice total as a gross amount and as a net amount and to state the VAT rate and the VAT amount precisely. The gross amount is what the customer then has to pay.
  4. If the customer receives a discount or particularly fast payers receive a discount, this must also be stated on the invoice. The term of payment always belongs in an invoice. A payment term of 14 days is common. Many founders specify seven days as the payment target or demand immediate payment of the invoice.
  5. At the bottom you can often find additional information, such as contact details for the company and the bank details for transferring the invoice amount.

Mandatory information when invoicing: What do different professional groups have to consider?

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Invoicing is critical to any business Significance, as it allows businesses of any kind to get paid for the goods or services they provide. It also helps keep track of your Finance and maintain a professional relationship with your customers. However, there are some Industries specific legal requirements, such as providing certain details on invoices or regulations on payment terms and deadlines.

1. Billing for medical services: special requirements for doctors and therapists

As a healthcare provider, you must ensure that you are adequately compensated for the medical services you provide. This includes not only the diagnosis and treatment of patients, but also the correct billing of these services. However, billing for medical services can be a complex and time-consuming process. In particular, managing the various billing codes, insurance requirements, and government regulations can be daunting.

2. Invoicing for freelancers: Obligations despite exemption from trade tax

Since freelancers tend to do a lot of things themselves, invoicing can often feel like a daunting and time-consuming task. Because even if they are exempt from trade tax liability, the same regulations apply to them as to traders with regard to invoicing. There are also special considerations for various sectors within the professional group of freelancers when it comes to invoicing. Freelance writers, for example, need invoices for each one they write Article or blog post, while consultants can provide invoices detailing their hourly rates and the services they have provided.

3. Trades requiring a license: What do self-employed agents need to know about invoicing?

In Germany, the Consulting to and the mediation of insurance contracts, loans or similar licensed business, which is subject to Section 34 of the Commercial Code. There are strict licensing requirements and registration requirements that serve to protect consumers. If you want to apply for a permit, you have to contact the relevant Chamber of Industry and Commerce. This also means that anyone who arranges loans as a self-employed person, is a trader and must comply with the same requirements for invoicing as all traders.

4. Invoicing for small business owners: What do you have to consider without sales tax?

For some traders, the small business regulation is worthwhile. If you decide to do this, you should definitely weigh all the advantages and disadvantages against each other. You can reduce the administrative burden clear reduce and make some things easier. Small business owners do not charge sales tax. This makes it easier to write the invoices. Two important advantages are that the advance sales tax return, which has to be sent regularly to the tax office, is completely eliminated, and it also doesn't matter which tax rate is the right one. The invoice only shows the net amount for the services rendered or the products sold. So that there are no misunderstandings, the invoice should contain a corresponding note that the trader applies the small business regulation in accordance with § 19 of the Value Added Tax Act and no sales tax must identify.

5. Invoicing for dealers in antiques and second-hand goods: Attention differential taxation!

trading in antiques, Art and used products is a fascinating and rewarding, but also a complex Shop. Here, too, special features have to be taken into account when issuing the invoice, because it is important to pay attention to the application of § 25a UStG as a means of differential taxation. This concerns the taxation of transactions with moveable physical objects for which input tax deduction is not possible (e.g. acquisition by private individuals or resellers). In such cases, the tax base for VAT is determined by the difference between the sales price (excluding VAT) and the purchase price of the item. The invoice must therefore refer to the application of the corresponding special regulations under Section 25a UStG (Section 14a (6) UStG). The wording “used items/special regulation”, “objects of art/special regulation” or “collectibles and antiques/special regulation” must be used.

3 options: Invoicing manually or using tools?

The self-employed, freelancers and tradespeople have several options for creating an invoice. You can create the invoice yourself using a Word or Excel template draw up and save it as an unchangeable document. Option two is to use one Vorlage for bills from Internet and the third option is software that makes billing easier. Software also has the advantage that it complies with all regulations and is always up-to-date, so fewer mistakes can happen here.

  1. Many founders write their invoices using Excel or Word templates, especially at the beginning. This has the advantage that no money is required for software. However, all customers must be created manually. The trader is responsible for the sequential invoice number. If the company is growing quickly and there are many invoices to be written, this can mean a lot of time.
  2. Sample invoices, which are available in large numbers on the Internet, have the advantage that the mandatory components are already included. The trader only has to fill in everything with his data. Here, too, everyone is responsible for the correctness of the information and the consecutive invoice number.
  3. Invoicing software can be of great help. They are always up-to-date and contain all the important regulations relating to invoicing. The tools are easy to use and the design can be customized. The tools automatically use a consecutive invoice number, which makes it much easier to create the invoices.

Invoicing software costs money and saves time

Invoicing programs do cost money Money, but it is not an enormously large one Investment. On the contrary, the Costs are comparatively small, but the benefit is high. With good invoicing software, even small companies can save a lot of time. The addresses and other customer data can be entered easily. This not only allows you to create invoices, but also offers. Often there is also the functionality expenditure capture. The programs show how high the monthly turnover is at the push of a button. The tools are always up-to-date, the customer's data is automatically inserted. This significantly reduces the error rate.

Many of the tools also have a DATEV interface. This gives the tax consultant access to all invoices and the recorded expenses. who his tax self-realized, has a helpful tool to correctly create the income surplus calculation. If all income and expenses are always recorded correctly, it is also possible to send the tax office all important data on time.

The principles of proper accounting

In Germany, the tax code regulates very precisely how business documents, including invoices, are to be recorded, documented and stored. Depending on the type of document, different retention periods apply. The statutory retention period for invoices is ten years. The so-called regulations of the GoBD.

If a company has not yet been founded, the trade has not yet been registered or even for occasional activities, private individuals may also write an invoice. Here, too, the invoices must contain all statutory information.

Can private individuals also write an invoice?

Because private individuals can also write invoices, as natural persons. Because private individuals are also allowed to have income in Germany up to a certain amount. It is very important to comply with commercial law. The trade register of the respective federal state has the relevant information ready for this. Municipal regulatory or trade offices are usually responsible for keeping the register.

It is important that the invoices of a natural person must also contain the prescribed information. However, they are not allowed to show or collect any sales tax. In addition, it is stipulated that this income must be stated in the annual income tax return.


An on account Writing correctly is not that difficult. Once you've created a template that includes all of the information required by law, you've already done most of the work. That is why it is so important to work carefully at the beginning and to find out exactly what the mandatory information is. This applies equally to credit brokers, insurance brokers and all other self-employed persons, freelancers and tradespeople. In the long run, the investment of time pays off right from the start.

Because if the invoice is issued correctly, the recipient of the invoice is obliged to pay the invoice amount on time, so that the money reaches the account faster. Those who then also keep their invoices in accordance with the specifications of the GoBD can look forward to a check by the tax office with ease. This means that all payment transactions are transparent and properly verifiable.

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