On this article we'll explain how invoices content and format is determined and how and when we apply VAT to the invoice. For more information on how to use this feature, please check this article.
Disclaimer: Before using this feature, please share this article with your accountant to make sure everything is ok on the accounting side and if there are exceptions that you need to be aware of. We're not responsible for any issues or accounting errors.
Note: We consider that you're a company from EU with a valid VAT ID verifiable via VIES.
Self-billing
FirstPromoter generates self-billing invoices, considering that you have included in your affiliate terms a clause where you inform the affiliates that you generate invoices for them. We recommend to ask your accountant or a lawyer on how this is handled in your country.
You can use our agreements management feature to update the affiliate terms and affiliates will be able to agree to it. We keep records of what was agreed, when and by whom in case of audits.
Numbering
The invoice number starts from 000000 and the default serial number/prefix is "AFF". You can edit the serial number/prefix from Settings > Others tab > Invoice prefix field. The number increases for each finalized invoice.
Invoice status
Paid - invoices are generated automatically after payment is made, in 95% of cases this is the only status you will see.
Draft - it happens rarely that some error is preventing the invoice to be finalized so it remains in "draft" state. You can check it and finalize it manually.
Open (finalized) - the draft invoice is finalized, but not marked as paid yet.
Voided - invoice was deleted. For accounting reason we need to keep the invoice in a "void" state.
Ensuring invoice details are valid
When an affiliate is created—whether through the signup page, admin promoter form, or API—we validate if the details are valid for invoicing. This validation is also performed whenever affiliate details are updated.
We also check if the VAT ID is valid for companies that provided their VAT ID (we use VIES API).
If any validation fails, we show a notice on the affiliate dashboard to review and update their details. A notification email feature will be added soon.
Note: We are unable to verify the accuracy of details such as address, country, etc. It is the user's responsibility to ensure these details are correct. If any of this information is incorrect, the invoice can be voided, and the payout can be marked as unpaid and then paid to regenerate the invoice.
Invoicing for individuals
FirstPromoter generates invoices for individuals as long as they provide their country and address. However, simply generating invoices may not be sufficient for accounting purposes in some countries. Please consult with your accountant to ensure all necessary requirements are met.
How we determine the invoice type
There are 3 types of invoices we generate based on some conditions.
A. Simple, non-VAT invoices
Doesn't mention VAT anywhere on the invoice. Click here to view an example.
This invoice is generated when:
the affiliate is a company located outside EU
the affiliate is a company located inside EU, but no VAT ID is provided
the affiliate is an individual (doesn't have a company name added), from any country
B. Reverse-charge VAT invoices (0% VAT)
VAT is mentioned, but it's 0. We also mention the word "Reverse charge applicable". This can be customized on the invoice template. Click here to view an example.
This invoice is generated when:
the affiliate is a EU company with a valid VAT ID, but from a different country than yours
C. Full VAT invoices
VAT is mentioned and is > 0. Click here to view an example. The VAT % is added to the invoice amount and the rate is the VAT rate in affiliate's country (which is the same as yours). You should be able to claim that paid VAT amount back.
This invoice is generated when:
the affiliate is a EU company with a valid VAT ID, from the SAME COUNTRY as yours
Customizing the invoice
The invoice can be customized entirely to make sure it complies to your country's regulations. We have a base template you can edit and we use Liquid templating language for increased flexibility.
To edit the template go to Settings > Others tab > click "Edit invoice template" button on the bottom.
You can check the HTML source code for Liquid conditionals, they are enclosed by HTML comments like this:
<!--{% if invoice.vat_invoice %}-->
<td>{{item.tax_rate}}</td>
<td>{{item.tax_amount}}</td>
<td>{{item.amount}}</td>
<!--{% endif %}-->
If you need help customizing the invoice, please contact us.