Invoicing obligations for sole traders (micro-entrepreneurs)

Every sole trader (micro-entrepreneur) is required to invoice their customers. The invoice is a commercial, accounting, legal and tax document that must follow certain rules and carry certain mandatory details.

It is essential to comply with these standards, because in the event of a dispute, anyone at fault has no means of forcing a bad payer to settle an invalid invoice. Here we lay out the charter of invoicing for sole traders. The easiest way to be sure you comply is to use invoicing software designed for sole traders.

The legal value of an invoice

An invoice attests to the commercial exchange between two businesses, or between a business and an individual. It must be provided on paper or in digital form.

Its value is:

• commercial, by describing the service or goods in detail;
• accounting, by being recorded in your sales journal;
• legal, by constituting proof of the commercial exchange and evidencing your right to payment, which obliges your customer to settle it;
• tax-related, by serving as the basis for the tax authorities to calculate the taxes and duties owed.

Documents preceding the invoice: terms of sale and quotes

Terms and Conditions of Sale

Publishing your own Terms and Conditions of Sale lets you detail the terms of the commercial exchange. These include, for example: payment deadlines, possible recourse, late-payment penalties, etc. They complement the quote or contract you signed with your customer. They are mandatory for any sale of goods or provision of services.

You can find terms-of-sale templates online, to be selected based on the nature of your business. All that’s left is to customize them.

The quote

A quote estimates the cost of the commercial exchange, whenever your service is not standard. It is not mandatory, particularly if you have a set price list. It is strongly recommended for any out-of-the-ordinary service, as it lets you specify all pricing and timing terms. It becomes a contract once approved and signed by your customer.

If you need to add services that did not appear in the quote, draw up an amendment that your customer must also sign, to avoid any dispute at invoicing time.

A quote can be sent by post, on paper, or by email, in digital form. It is generally free, but nothing prevents you from charging for it. If you do, you must inform your customer beforehand. This is common in the building trades — for example, if you travel and spend time on a site visit, taking measurements, etc.

The purchase order

The purchase order confirms the contract between you and your customer. It is not mandatory, but is advisable to commit your customer if you have not drawn up a quote. If the order corresponds to a fixed price, this document serves as proof that the order was confirmed. It can therefore be useful in the event of a dispute.

To be legally valid, it must be signed by your customer.

Invoicing on paper or electronically?

A paper invoice, even handwritten, remains a legal document, provided it carries all the mandatory details.

A sole trader’s invoice can also be created digitally and then emailed to the customer. In this case, you must make sure the customer accepts this format and has the tools to read the documents.

Invoicing by sole traders to public-sector bodies

If you work with the public sector (schools, hospitals, local authorities or any other public institution), you have been required since 1 January 2020 to issue electronic invoices.

You must use the Chorus Pro portal, where you create your account and which you then use to send your invoices.

Mandatory details that must appear on the invoice

For a sole trader’s invoice to be legal, it must carry the following mandatory details.

• The word “Invoice” must appear on your document.
• Your identity: name and contact details.
• Your SIREN number, followed by the mention: registered with the RCS or RM of city X. (If your sole proprietorship is still being registered, indicate “SIREN being assigned.”)
• Your customer’s identity.
• The date the invoice was issued and the date of delivery.
• The invoice number. Note: two invoices cannot share the same number — you must either issue a corrective invoice or a credit note.
• The description of the service or goods.
• Discounts, etc.
• See our full article on mandatory invoice details.

Invoice record-keeping

Invoices issued on paper must be kept for 10 years from the issue date. If you digitize them, you must keep them for 6 years.

Invoices issued directly in digital form must be kept as such, or printed and kept, for 10 years.

Using invoicing software for sole traders

Let’s look at the benefits provided by invoicing software such as Bizyness.

Proper bookkeeping for your micro-business

Using invoicing software for sole traders saves you time while helping you avoid costly mistakes. Certified invoicing software designed for sole proprietorships lets you automate your bookkeeping. Quotes, purchase orders, invoices and delivery notes are drawn up in a few clicks, with the assurance that no mandatory detail is missing. You also avoid accounting errors and duplicate numbering. You also get an estimate of the future contributions you’ll owe to URSSAF.

All the tools you need: revenue ledger, sales journal, purchase register…

This type of software gives you access to your customer’s history, which simplifies tracking your business relationships. You can integrate all the tools essential to your bookkeeping: revenue ledgers, sales journals, purchase registers, VAT reports, expenses, supplier invoices, and more.

If you run an online store, simply sync your invoicing software to save precious time.

Invoicing software ensures proper bookkeeping for your micro-business. It protects you in the event of an audit and offers the huge advantage of centralizing everything in a single tool.

Your information gathered together and customer tracking for your business

All the information you collect on a customer is gathered in a single file. You know their business history and can take notes on their specific needs. These notes are invaluable for providing a personalized service. You can also add personal details, such as their birthday or favorite hobby, giving you opportunities to show them you care.

With this type of software, you also know your business’s performance at all times, telling you whether it is growing, declining or stagnating. This lets you take the necessary steps to redirect your strategy if the trend doesn’t match your expectations and isn’t satisfactory.

Features of invoicing software for sole traders

Invoicing software for sole traders should include at least three essential features: invoicing, bookkeeping and integrations. That’s exactly what Bizyness offers.

Invoicing for your micro-business

Invoicing software first lets you build your customer file, the foundation of your business. As new prospects reach out, you create a record to issue a quote. If a prospect follows through on your offer, you convert them into a customer, which leads you to invoice them once your service has been delivered.

Bookkeeping

Bookkeeping quickly becomes an extremely time-consuming burden for a solo entrepreneur, yet it is essential — both for you and for the tax authorities. With invoicing software for sole traders, you centralize your information, simply and without wasting time.

By integrating your expenses into your bookkeeping, you get a complete overview. It helps you spot costs that can be reduced or eliminated, and to keep only the essential items. These are often recurring expenses, such as rent for your premises, for example. Here too, by tracking these expenses, you can find ways to reduce these costs.

If you exceed the legal VAT threshold applicable to sole traders, the software calculates it and factors it into your invoicing. It is also programmed to produce the mandatory VAT returns.

Your software’s bookkeeping tab automatically generates the two reports required by law: the revenue ledger and the purchase register. It also lets you export the documents of your choice, which may be intended for your accountant, your banker, potential investors, and so on.

Lastly, the tool supports you day to day. It estimates the contributions you will need to pay to URSSAF, based on your revenue. Whether you pay your contributions monthly or quarterly, this calculation helps you set aside the cash needed to stay solvent when payment is due.

Integrations

Integrations are valuable tools for managing your business. Automation saves you considerable time and lets you closely track your company’s progress.

Three areas are involved:

• First, bank syncing confirms that your bookkeeping is accurate and that you haven’t overlooked anything. You know your cash position in real time and easily spot unpaid invoices that need a reminder. When you match your expenses, you can categorize them for better management.
• Second, if you run an online store, it’s essential to choose invoicing software designed for e-commerce sellers. Manually managing this type of business is extremely time-consuming. You need to focus on growing your business and leave syncing tasks to your software. Thanks to it, you gain visibility into your activity, while all your documents (quotes, invoices, credit notes, etc.) are issued and sent automatically or on request, depending on your settings.
• Finally, automation with tools like Zapier lets you save even more time. It lets you fine-tune the operations you want to systematize. All operations that don’t require your intervention are carried out according to your settings, freeing up time to devote to the commercial side of your business.

How to choose the right professional software

Your software must be suited to invoicing for sole traders, so that it meets all the needs tied to this status. It’s in your interest to find a multi-function tool that lets you centralize everything. This helps you avoid bookkeeping errors and gives you an overall view that is very useful for running a business.

Several invoicing software options are available online. You need to make sure the company behind them provides quality customer support. It’s essential to have as direct a line of contact as possible with the site’s team.

You should also make sure the software continues to be actively developed. This is essential first because laws and standards are constantly changing and the software must be kept up to date. Second, you can then count on new features that keep improving the tool.

Having close contact with your software’s team is also an opportunity to share your feedback and suggest options they may not have considered.