Supply invoices are a type of invoice that is used in specific situations and can be useful in resolving non-payment problems. In this article, we will explain everything you need to know about this type of invoice, including its definition, how it works in cases of non-payment, the risks and benefits of its use, some tips for its proper use and its alternatives.
What are supply invoices?
A supply invoice is a type of invoice used for the reimbursement of expenses incurred by the supplier, such as the purchase of specific materials or tools for the performance of the work. Unlike other invoices, supply invoices do not include a profit for the supplier, but simply cover the costs incurred in carrying out the work. In this sense, supply invoices are a very specific type of invoice that is only used in certain situations.
How do they work in situations of non-payment?
In situations of non-payment, supply invoices can be very useful in securing payment of costs incurred by the supplier. These are used to reflect expenses incurred by a professional or company on behalf of the client, such as transport costs, accommodation, equipment, etc. These costs are not part of the service or product offered, but are necessary to carry it out.
In situations of non-payment, it is important to note that supplementary invoices are not subject to the same rules as regular invoices. In other words, they do not have the same payment terms and can be subject to customised agreements between the parties.
However, in the event of non-payment, the professional or company that has incurred the costs of the supply can claim payment from the client, as it is an enforceable debt. In these cases, it is important to have documentation to prove the expenses incurred, such as transport bills, hotel receipts, etc. The supplier may demand payment of the supplementary invoice instead of the main invoice. In this way, at least the costs incurred by the supplier in carrying out the work are guaranteed to be paid.
In some cases, it may be agreed with the customer that the cost of supplies will be included in the main invoice, so that you have a single document reflecting the service or product offered and the costs necessary to carry it out. This simplifies the invoicing process and avoids confusion or misunderstandings.
In short, invoices for supplies are an important element in situations of non-payment, as they allow the payment of expenses incurred on behalf of the client to be claimed. It is important to have the necessary documentation to support these expenses and to establish clear and personalised agreements on payment terms and the inclusion of these expenses in the main invoice.
Risks and benefits of supply invoices
Like all types of invoices, supply invoices have both risks and benefits that should be considered before deciding to use this type of invoice.
Among the benefits is the possibility for the company to pass on to the customer the costs it has incurred in order to provide the service or deliver the product. This can be particularly useful in cases where the use of specific materials or tools that are not part of the original cost of the product or service is required.
In addition, these invoices allow the company to separate the costs of materials and tools from the main cost of the service or product. This is useful for company accounting and can simplify the invoicing process.
On the other hand, the benefits are evident in situations of non-payment, as they allow guaranteeing at least the payment of the costs incurred by the supplier.
However, supply invoices also present some risks. Firstly, it is necessary that the expenses included in the invoice for supplies are real and duly justified, otherwise the company may engage in an unlawful practice.
One of the main risks is that their misuse can lead to penalties and fines from the tax authorities, so it is important to ensure that their use is appropriate and justified. In addition, in case of non-payment, the company may have difficulties in collecting both the main invoice and the supplementary invoice, as the two may be related and the customer may refuse to pay because he considers that the additional costs are not justified.
In summary, supply invoices can be useful to pass on additional costs to the customer and simplify the company’s accounting, but they should be used with caution and with proper justification of the additional costs.
Tips for the proper use of supply invoices
In order to use supply invoices properly, it is important to take into account the following tips:
- Analyse the situation carefully: before using supply invoices, make sure that you really need to do so and that it is an exceptional situation that justifies their use. If not, you may be engaging in abusive or unethical practices.
- Set out the terms in advance: As with any other type of invoice, it is important that you set out the terms of the transaction in advance, including the amount of supplements and payment terms. This will avoid misunderstandings or conflicts in the future.
- Document everything properly: to avoid problems, it is essential that you document all transactions properly, including allowances and their justification. In this way, you can easily substantiate any claims that may arise.
- Use supply bills sparingly: although they can be useful in exceptional situations, they should not be abused. If you use them too often, you could create mistrust in your customers or suppliers.
- Check them: Before accepting a supplier’s supply invoice, be sure to check it carefully to make sure that it conforms to what was agreed and that it includes all the necessary information.
- Seek professional advice: if you have doubts about the use of these invoices or need advice, do not hesitate to seek the help of professionals specialised in the matter. They will be able to guide you on the best way to use them and avoid possible risks.
What are your alternatives to supply bills?
There are a number of alternatives to supplementary invoices that can be used in situations of non-payment. Some options are presented below:
- Factoring: This consists of assigning your unpaid invoices to a company specialising in this service, which will collect them for you in exchange for a commission. In this way, you can obtain immediate financing and avoid the risk of default.
- Confirming: This is a service that allows you to pay your suppliers’ invoices through a financial institution. The supplier receives payment in a shorter period of time than initially agreed, which can be beneficial for the supplier. This service can also include an insurance against non-payment.
- Deposit: Instead of using supply invoices, you can choose to request a deposit from your customers or suppliers, which will act as a guarantee of payment in case of non-payment.
- Payment arrangement: If the customer or supplier is in financial difficulties, you can propose a payment arrangement in instalments or instalments that allows them to meet their payment obligation in a more flexible way.
For more information on these alternatives, click here.
Another solution is Byppay, which offers you a solution to the supply invoices, to secure your payment, avoiding the need to resort to this type of invoices.
On the one hand, we help contractors, who buy from a supplier and sell to third parties. Through the Byppay contract, you can settle your debt with your supplier, without having to wait for your customer to pay you. On the other hand, we help when a customer does not pay a supplier. In this case, the Byppay contract would do the same: instead of your customer paying you for your materials, you would directly access your customer to pay you for your labour.
For more information you can apply to test our application here.
