Invoice: what it is, why it is needed, and how to issue one

When business partners work together, there is often a need to confirm that work has been performed or services have been provided. Since the Ukrainian government plans to abolish or simplify the use of work completion certificates, businesses will have to find new document management models to confirm these transactions.

In the European Union, invoices have been used for this purpose for a long time. In this article, we will look at what an invoice is, how it differs from an accountl, and how to issue an invoice online in Ukraine.

What is an invoice?

An invoice is a document that confirms an agreement between a seller (or service provider) and a customer. It details the buyer’s order and the total amount to be paid.

In other words, an invoice is a bill for payment that shows what the customer has to pay for and how much, and is a legally significant document for both parties.

Invoice contains:

• a list of goods or services,
• the quantity of each good or service,
• the price per unit and the total amount to be paid,
• the terms of payment and details for transferring funds.

According to Ukrainian law, after payment for goods or services, an invoice can be considered a primary document and used in accounting. To do this, the following requirements must be met:

• Payment must be made. This is confirmed by receipts, account statements, and other payment documents.
• The invoice must contain the details required for primary documents. These are specified in Article 9 of the Law of Ukraine «On Accounting and Financial Reporting in Ukraine».

Invoices are used both in domestic business in Ukraine and in international trade. In international transactions, they help to complete customs documents, confirm payments, and maintain accounting records.

Ukrainian companies operating in foreign markets use invoices for customs clearance of goods and legal transfer of funds to bank accounts in Ukraine.

Why are invoices used in business?

Invoices have several key purposes:

• Confirmation of a purchase and sale agreement
  An invoice signed by both parties is an official document with legal force that can be used as evidence in court in the event of a dispute. For example, if a supplier has issued an invoice for services and the customer has paid it, in the event of a dispute, the invoice will serve as proof of fulfillment of obligations.
• Basis for receiving payment
  An invoice serves as an official request to the customer to transfer funds for goods or services. It contains all the necessary payment details: amount, description, bank details.
• Accounting and taxes
  An invoice is the main document on the basis of which purchase and sale transactions are recorded. It allows you to keep accurate records and calculate tax liabilities.

Types of invoices

There are several types of invoices in international law, but in Ukraine, two types of invoices are most commonly used:

• Proforma invoice;
• Commercial invoice (Invoice, Facture, Rechnung).

📄 A proforma invoice is a document that indicates the seller’s obligation to deliver goods or provide services to the buyer at a pre-agreed price. In essence, it is a preliminary invoice for payment that does not confirm the fact of shipment of goods or provision of services.

The price and list of goods in a proforma invoice are not final and may change during the order confirmation process. For example, the parties may change the quantity or models of goods. A proforma invoice is often issued when goods are delivered free of charge (e.g., humanitarian aid, for participation in exhibitions, promotions, auctions).

📄 A commercial invoice (Invoice, Facture, Rechnung, etc.) is a document used for customs declaration when selling goods exported across international borders. The company must send a commercial invoice to the buyer along with the shipped goods. Without it, the goods will not be cleared through customs and admitted into the territory of the state. VAT and customs duties are also calculated based on this document.

What details does an invoice contain?

Ukrainian legislation does not provide for an approved form of invoices or requirements for filling them out. However, for an invoice to be considered a primary document, it must contain the following details:

• invoice title — this refers to the numbering of the document itself;
• date of invoice;
• seller details — information about the individual entrepreneur on whose behalf you are providing services and to whose account you are receiving funds;
• the nature and volume of goods or services provided;
• units of measurement;
• price and total amount;
• signature or other information that makes it possible to identify that it is you who provides the services and participates in these relations with the client.

Companies engaged in foreign economic activity often issue invoices in English or other foreign languages. However, according to paragraph 1.3 of Regulation No. 88, all primary documents in Ukraine must be drawn up in Ukrainian.

Tax authorities emphasize that documents that serve as the basis for accounting and are drawn up in a foreign language must have an authentic translation into Ukrainian (paragraph 1.3 of Regulation No. 88). Therefore, it is advisable to draw up the invoice in two languages at once (for example, Ukrainian and English) or to provide an authentic translation into Ukrainian.

Let us consider a sample invoice drawn up in accordance with the following requirements:

Invoices in the document management system

📄 How does an invoice differ from an account?

In Ukraine, accounts are often used instead of invoices to request payment for goods or services. However, there are a number of differences between these documents.

🧾 How does an invoice differ from a receipt?

There are a number of differences between an invoice and a receipt: an invoice is a formal document confirming a commercial transaction, containing a complete list of goods or services, the details of the parties, and the amount. A receipt, on the other hand, is mainly used to confirm the fact of purchase and is not always suitable for tax or accounting purposes.

Key differences:

• Nature of the document: an invoice is a more formal document confirming a commercial transaction, while a receipt is simpler and is mainly used to confirm a purchase.
• Information contained: an invoice contains information about the counterparty, goods/services, date of issue, and document number. A receipt contains basic information such as the name of the seller, date of purchase, and total transaction amount.
• Tax requirements: an invoice is required for tax purposes and serves as an accounting document for companies. A receipt can be used as proof of purchase, but cannot always be used for VAT purposes.
• Evidential value: an invoice is accepted by tax authorities as a valid document confirming a transaction, while a receipt is more of a proof of purchase for the customer.
• Document storage: An invoice must usually be kept for a certain period of time for tax and accounting purposes, while a receipt can serve as proof of purchase but does not need to be kept for a long time.

📑 Can an invoice be used instead of a delivery note or certificate?

According to Ukrainian law, an invoice cannot completely replace a delivery note or certificate of work performed. It cannot be used to confirm the transfer of ownership of goods or their physical movement, or to confirm the fact that work has been performed.

In such cases, hybrid documents containing the details of the invoice and delivery note (invoice-delivery note) or certificate (invoice-certificate) are used. The invoice-delivery note for goods must contain information about the actual shipment of goods by the seller and their receipt by the buyer. The invoice-certificate for the provision of services must indicate that the entire list of services has been provided and that the customer has no complaints.

Electronic invoices

The advent of electronic document management has greatly facilitated the exchange of documents between sellers and customers. Traditional paper documents are becoming a thing of the past; now entrepreneurs can quickly generate invoices using online services, knowing only the buyer’s mobile phone number or email address. There is no need to fill in numerous fields in the payment document, which has greatly simplified the procedure for creating an invoice.

Online invoicing offers many advantages for the seller:

• control of all fund movements in your personal account on the website of the payment system, bank, or electronic document management service;
  the ability to check payments for previously issued invoices;
• quick document generation;
• the ability to analyze all invoices sent and identify the most profitable customers.

The buyer also benefits from using online invoices. In particular, they receive the following advantages:

1. Convenient online payment. Paying a bill online is much more convenient, as there is no need to enter any recipient details — everything is already prepared.
2. Official confirmation of the transaction. An online invoice is an official document from the seller that can be used to defend your interests if the entrepreneur has not fulfilled their obligations under the agreement properly. If the payment was made by transferring money to a bank card or e-wallet, it becomes much more difficult for the buyer to protect their rights.
3. Reliable protection of personal data. All security measures of the payment system are used for the transaction.

How to create an invoice in the Vchasno.ODE service

Vchasno.ODE is a convenient electronic document management tool that automates invoice processing.

It allows users to create invoices conveniently and easily in the following ways:

• through integration with accounting systems (1C/BAS) or CRM systems (Creatio);
• by uploading an invoice created manually on a computer to the service;
• using templates in the service.

How to simplify invoice processing with Vchasno.ODE

The Vchasno.ODE service not only ensures fast sending and receiving of documents, but also optimizes all processes related to invoices. Let’s take a look at the main benefits that companies get when using Vchasno.ODE for invoice exchange.

✅ Faster payments

Documents are approved instantly, which speeds up payment receipt from several days to several hours.

If a company sends an invoice by email, the customer must print it, submit it for internal approval, and manually enter the data into the accounting system. This delays payment.

📌 Advantage of Vchasno.ODE. Thanks to customized integration, electronic invoices are instantly sent to the counterparty’s accounting system. The service automatically sets up an approval route for them. This reduces the payment period to a few hours.

✅ Minimization of errors

Companies send invoices in .pdf format by email. The accountant must manually transfer the data to the accounting system. This often leads to errors. As a result, accountants spend additional time on reconciliation and correction.

📌 Advantage of Vchasno.ODE. Thanks to integration with the accounting system, the invoice is transmitted as a structured file. The data is automatically transferred to the accounting system, and employees do not make mistakes.

✅ Legal security and reliable storage

Email is not a legally valid channel for delivering documents, and its archive is not a reliable storage facility. In the event of a tax audit, the company will be forced to prove the legal validity of the documents.

📌 Advantage of Vchasno.ODE. Invoices are signed with a qualified electronic signature and stored in a secure cloud archive. This guarantees legal validity and simplifies auditing.

✅ Centralized document control

If a manager sends invoices by email, they cannot control whether the document has ended up in the spam folder, whether the counterparty has viewed it, whether they have approved payment, etc.

📌 Advantage of Vchasno.ODE. The manager can see the status of the document in real time («Received», «Viewed», «Approved», «Paid»). This significantly improves financial control. If there are delays, the manager can remind the client about payment in a timely manner.

As a company that has been working with international partners for a long time, we are ready for any formats — invoices, electronic confirmations, acts, or their analogues. This is not a threat, but an opportunity for businesses to transition to modern digital practices that simplify life for companies and reduce bureaucracy.

Anton Skokov, Head of Vchasno

With Vchasno.ODE, working with invoices becomes as transparent and controllable as possible. You set up your own approval scenarios, connect responsible employees, track account statuses in real time, and store all documents in a secure electronic archive. This means less bureaucracy, faster approvals, and complete control over payments.