Making sure that your Shopify store’s invoices are compliant saves you a lot of time and energy in the long run. Having to fix small mistakes that have escalated into big headaches further down the road is never enjoyable, nor is getting into trouble with the tax authorities.
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DownloadAt Sufio, they’ve helped thousands of stores automate their invoicing, learning a great deal about what’s needed to stay compliant in the process.
So here are our five key tips to keep your Shopify Store’s invoices on the right track, saving you time and giving you greater peace of mind.
One of the biggest—and most common—mistakes when it comes to invoice compliance is failing actually to send them in the first place.
Unless you’re only shipping a few orders per week, manually creating invoices for each order will quickly become unmanageable. Forgetting to send them for every order - or making mistakes - is all too easy in this situation.
This matters because almost all countries mandate that online store owners carefully keep financial records, including all transactions, for several years. Without thorough and consistent invoicing practices, it’s impossible to meet this requirement. It can also land your customers in trouble, as they may need your invoices for their own tax and accounting purposes.
Automating this process ensures that every order is accompanied by a compliant invoice. This reduces the risk of human error, keeps you compliant, and frees up valuable time for you to focus on more important aspects of your business.
Shopify doesn’t allow you to send invoices automatically, but tools like Sufio can generate invoices immediately after every order confirmation. This makes managing your invoicing stress free, saves you time, and prevents costly mistakes like forgetting to send invoices.
Shopify stores selling beyond their own borders will need to keep an eye out for the different regulations for invoicing that exist in every country. These requirements cover everything from the information you need to include on invoices to protecting consumer data.
For instance, if you're selling to customers in the EU, your invoices must comply with GDPR by protecting personal data. This includes not keeping invoice personal data for longer than necessary. It also means not using it for any purposes apart from invoicing, like these major UK retailers who were caught misusing e-receipt data for marketing.
To give another important example, many countries require invoices to include customs information values, such as Harmonized System (HS) codes and Country of Origin (COO) codes. You need to make sure every invoice includes these when shipping to countries like India.
Tax compliance is a critical aspect of your invoicing process. Incorrect tax calculations can lead to audits and penalties from government authorities. The tax rate you need to apply can depend on various factors, such as the nature of the goods you’re selling, the customer’s location, and specific tax laws in your or the buyer's country.
For example, when it comes to VAT, there are quite big variations even within the EU, despite the bloc’s efforts over several decades to make rates more uniform across the single market. VAT rates are as low as 17% in Luxembourg, and as high as 27% in Hungary. These variations can become even bigger and more complex when accounting for the reduced rates or exemptions that certain goods benefit from.
It’s important, then, to make sure you set up your Shopify store to automatically apply the correct tax rates to your invoices for every country you sell to.
B2B transactions often involve higher amounts and stricter accounting practices than B2C ones, making it essential to provide detailed invoices that can be easily integrated into your customers' accounting systems.
When selling to other businesses, your invoices need to include additional details that are not typically required for consumer transactions. This usually includes the buyer's VAT or GST number and your company's registration number.
Your invoices will often also need to include purchase order numbers, as business customers often need these when referencing purchase processes. Without this, the process of getting the transaction approved by the customer may end up being delayed.
For those running Shopify stores, time is too scarce to dedicate to things that software can automate. High-quality invoicing software can put almost all of your invoicing on autopilot, allowing you to focus on what matters.
Good automation software seamlessly integrates with your Shopify store and processes thousands of transactions daily. It captures data like product descriptions, quantities, prices, and taxes, and sends all of this to customers, with near-perfect accuracy.
For Shopify stores that have grown beyond the startup phase and have more complex finances, specialized accounting support could also be useful. However, for smaller stores, a reliable automation tool will ensure that invoices are compliant and professional.
Sufio integrates seamlessly with your Shopify store, automatically creating invoices for every order. Certified accountants regularly validate our invoices, ensuring that they’re compliant in over 50 countries worldwide.
By putting your invoicing processes on autopilot, Sufio allows you to focus more on growing your business.
Try the 14-day free trial today and see how Sufio saves you time and hassle by helping you automatically send Shopify invoices that comply with international regulations.
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