Articles

In collaboration with Bokio

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In many companies, the invoice is an important pillar for success. Without getting paid for their hard work, there are no companies going around. As an entrepreneur there can be a lot to consider, in this guide we cover everything you need to know about invoices and invoicing.

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What is an invoice?

Let's start with the most basic: what exactly is an invoice? It can be said that an invoice is a document that is created by a seller and sent to a buyer. Once an invoice is paid, it acts as a written proof that the payment has taken place. When doing business with other companies, a full invoice should always be drawn up.

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Exactly how an invoice looks may differ slightly from time to time and between companies, there are also slightly different types of invoices that affect its appearance but above all its function.

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As an entrepreneur, invoicing is one of the most common ways to charge, having a good handle on how to handle invoices, both how you send them and how you pay them is important for the success of your business. If your business handles a lot of invoices, an effective invoicing program can make it easier and save a lot of time.

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What is the difference between invoice and bill?

In everyday speech, the words invoice and bill are often used interchangeably to describe the same thing. In fact, it's just the same thing: a written demand for payment.

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As a private individual, the concept of counting is often used, while invoices are often used from company to company. But invoice and invoice refer to the same thing.

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What does an invoice look like?

An invoice may look a bit different, depending on industry standards and your preferences. But there are certain things that an invoice must contain:

● Name, address and contact details of the seller and buyer.

● Invoice number and invoice date.

● A description of the goods or services that have been delivered, including quantity and price.

● VAT-registration numbers of the seller and buyer.

● The total amount payable, including VAT and any other fees or rebates.

● The payment terms, including due dates and accepted payment methods.

● Any additional information that may be relevant, such as delivery details, contract number or order number.

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If you are billing customers from other countries, there may be additional things to include. It is common for invoices to differ from each other both in terms of style and form.

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How to pay invoices?

How to pay an invoice may vary from case to case depending on the type of invoice it is and the solution that you pay with. Most often, the invoice indicates how the payment is supposed to be made.

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A common way to pay invoices is by means of a direct bank transfer. Exactly how you go about this can vary between banks, and often there are several ways to pay an invoice.

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In recent years, more modern payment methods have emerged, such as Swish and Klarna. Many companies offer the customer different options for paying the invoice, where the customer himself gets to decide what is best suited.

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In the vast majority of cases, it is relatively self-explanatory how you go about paying an invoice.

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Dispute invoices

Sometimes a customer may dispute an invoice, which means that the customer does not approve the invoice. There may be various reasons for disputing an invoice. It could be that the amount of the invoice does not correspond to the amount agreed. In any other case, it may be because the service did not deliver the kind of quality agreed upon by you. In a third case, the price may be correct but that the wrong type of service or goods has been specified.

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As long as the disputed invoice has a relevant basis, it is usually easy to reach a solution by discussing what has gone wrong with the customer in question. Most of the time it is just to credit the old invoice and send a credit invoice to the customer/company.

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If a customer disputes an invoice, it is a good idea to keep the information about the invoices in force and the communication so that you can substantiate your arguments in case the dispute should involve the assistance of a third party.

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How to invoice?

Sending invoices is an important part of running a business, therefore it is important to know how to bill your customers. Exactly how you go about sending an invoice varies slightly depending on whether you send an invoice through a self-employment company, through your own company “manually” or from an invoicing program.

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Below is a general guide on how to proceed with invoicing:

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● Create an invoice

Use an invoice template or billing program to create an invoice. Double-check that all necessary information is included on the invoice.

● Send the invoice to the customer

Once you have created an invoice, the next step is to send it to the customer. Nowadays, sending invoices online is the most common, as it requires less administrative work and is more time efficient.

● Follow up on payment

Register when the time to pay the invoice expires. If the customer does not have

paid before its due date and you should send a reminder. If the customer does not pay anyway, you will have to look at possible measures to recover the money, however, this is a very rare situation.

● Register the payment

Once you have received the payment, it is time to register it in your accounts and file the invoice. If you use Bokio Business Account, the payment is matched to the invoice by itself and posted automatically.

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Invoice template

For someone who has never sent an invoice before, it can be very helpful to get a ready-made template to start from. Then you get a lot of help along the way and don't have to create the invoice from scratch.

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Having a ready-made invoice template not only does not make you feel unsure if you have included all the contents of the invoice, it can also save you a lot of time by simply changing the details every time you send a new invoice.

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There are a variety of invoice templates available on the internet, so before using any, it is important to ensure that it is a credible company behind it and that the invoice template contains everything you need to invoice your customers.

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All companies are obliged to record their business events, which means that you must have an accounting program to your company. Many accounting systems have integrated billing functions, which means that you do not need to have a single system for invoicing and accounting. Another advantage of invoicing from your accounting program is that your invoices are integrated directly into your accounting.

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Is it possible to invoice without a company?

Yes, you don't have to start your own business to send invoices. Nowadays, there are a variety of so-called self-employment companies on the market, whose business model is that you send invoices through them in exchange for a fee.

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Self-employment companies simply act as an intermediary for you and the customer to whom you are invoicing. In connection with invoicing, self-employment companies pay taxes and social security contributions on your behalf.

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However, it should be mentioned that if you plan to invoice on a regular basis, it is much more advantageous to start your own business and invoice that way instead.

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In addition to not having to pay a fee on each invoice, there are many advantages to running a business, such as the ability to deduct equipment and the ability to collect low-tax dividends (if you have a limited company).

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Invoice purchase

Invoice purchasing, also known as factoring, is an economic service that involves a third party purchasing a company's invoices. Since the credit period on an invoice is usually 30 days, this means that the company is out of money during this period.

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To avoid this, you can sell your invoice through invoice purchase, then you get paid directly at the same time that the company that buys the invoice is responsible for receiving the payment from the customer. This is done in exchange for a fee that often equates to a couple of percent of the invoice amount.

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Invoice purchases can be particularly useful for businesses with long payment times or experiencing temporary liquidity problems. It could also be a solution for small and growing businesses that need extra capital to fund expansion.

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Terms of payment on invoices

The payment terms on an invoice include the terms and conditions that determine how and when a customer will pay the invoice. It is up to the seller to decide which these are, based on the legal framework that exists. It is important that the terms of payment are clearly communicated on the invoice.

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Common payment terms include:

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Payment methods

Different companies accept different payment methods. Bank transfer, Swish or card payment with Visa or Mastercard are common payment methods.

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Delay interest

It is important that it is clearly stated what happens if the recipient does not pay the invoice within the specified time frame. The payment terms you choose to have for your business can have an impact on how your customers experience doing business with you.

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If you have a long credit period, it can be something that is attractive to the customer, while at the same time posing a greater financial risk to you. On the contrary, a short credit period is good for your liquidity, but it can feel stressful for the client.

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Expiration date

The due date on an invoice is the date on which the payment should be received by the seller. This means that if you have paid an invoice on the due date with a payment solution that takes one business day, the payment will be delayed.

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The due date is usually high on the invoice and can be formulated in slightly different ways, for example: “payment to us” or “due date”.

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The number of days the customer has to pay the invoice may vary. The most common is that the customer has 30 days to pay from the moment he or she has ordered a good or service. However, just 30 days is not required by law and there may be both shorter and longer credit periods (the time between the time of billing and the time of payment).

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Different types of invoices

In this guide we have so far only talked about invoices in general, but the fact is that there are many different types of invoices. All of them have in common that they aim to collect a payment from a customer, but that is where the similarities end. Below we go through the different types of invoices.

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A Conto Invoice

An a conto invoice is a type of invoice that is split over the course of a project. It can be seen as a kind of installment payment in advance, and can be beneficial for projects that run over a long period of time or involve large sums of money.

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Proforma invoice 

A proforma invoice is a relatively uncommon type of invoice and unlike standard invoices, the purpose of a proforma invoice is not to get paid. A proforma invoice is used as a formal document to state what the contents of a package are in the context of export.

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For example, if you send a gift or a customer sample to a customer abroad, a proforma invoice serves as a basis for what the package contains, which can help in customs matters. However, the pro forma invoice is thus not legally binding to request a payment.

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Credit invoice

A credit invoice is used to correct an incorrect previously sent invoice. This may be necessary if, for example, the customer has paid an invoice and then realizes that there was something wrong with the product or service. For example, that the price was incorrect, that the service was delivered incorrectly or that the service did not correspond to the agreed terms.

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A credit invoice is sometimes referred to as a reverse invoice, minus invoice, or credit note.

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Rout/Root Invoice

If you perform services that fall under the RUT or ROT framework, you must reduce the amount on the invoice, and then have the last part of the work income paid by the Swedish Tax Agency. Bokio supports sending invoices with RUT and ROT deductions.

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E-invoice

An e-invoice is an electronic invoice that is integrated directly into various business systems, including accounting software. If you normally send invoices by PDF, you need to do manual work to administer the invoice, but an e-invoice is handled entirely electronically and registered directly in your recipient's financial system or bank.

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Self-invoice

Normally, it is the seller who creates and sends an invoice to the customer. A self-invoice, on the other hand, means the opposite — namely that the customer draws up an invoice for himself in the name of the seller. A self-invoice is also called a reverse invoice.

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This can be a good solution if you are a consultant who regularly invoices the same client, because you yourself have good control over the time reporting and thus invoice the correct number of hours.

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Although it is the customer who creates the invoices, it is always the seller who has the ultimate responsibility over them.

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Simplified invoice

A simplified invoice is an invoice that does not have as extensive requirements as to what it should contain as a regular invoice. However, information about when the invoice was issued, who the seller is, what goods or services have been sold and the VAT due must always be included, even on a simplified invoice.

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Invoice with Bokio

Billing can be a bit cumbersome, but with Bokio it becomes easy. When invoicing at the same place you post, you don't have to keep track of which invoices have been paid or not manually. Bokio keeps track of you, and posts the payment automatically as soon as an invoice has been paid.

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Read more about billing in Bokio

In collaboration with Bokio

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Running a successful business requires having a good track of how the business is performing. Which products or services generate the most money, or which area is most profitable? Get a better track of your company's finances with the help of cost centers!

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What are cost centers?

A cost center is a place within a company where costs are incurred. For example, it can be different departments, functions or units of a company. Depending on the size of your business and industry, you may benefit from a variety of cost centers.

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By assigning costs and revenues to specific cost points, the company can see where and how money is being spent. It makes it possible to identify areas that are doing economically well and badly, respectively, which can facilitate the management of your business.

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If your business consists of two areas, renting apartments and renovating apartments, perhaps the rental generates a high profit while the renovation part goes plus minus zero. If the company does not use cost centers, you cannot see these figures in black and white — but if you were to post with cost centers, you can get exact figures on how the different parts perform individually!

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Examples of how cost centres are used

Cost centers and other economic concepts can sometimes be difficult to understand, so let us concretize cost center with an example.

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Benny runs a clothing store. He has various departments in his company, including purchasing, sales and marketing. When Benny books, he equates each department as a cost center, attributing costs and revenues to the correct area. In this way, Benny can get a good idea of what costs and revenues each department has.

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Benny can choose for himself how he chooses to divide his cost centers. He can choose to divide the cost point “sales” into even smaller parts, for example through “children's clothing”, “women's clothing” and “men's clothing”.

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If he wants to gain insights on a detailed level, he can divide the cost points by brand or by category of garment. Instead of getting a picture of the performance of the whole business, he can get a more detailed picture of his performance, which can be the basis if he needs to tighten the budget or is going to make an investment.

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Who benefits from using cost centres?

As a self-employed person, you can use cost centers to better understand where your strengths and weaknesses lie in your company. It allows you to make more informed decisions to further develop your business.

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Companies with different areas

You who run a company that has different areas benefit from being able to divide the income and costs of the different areas. But even you who are, for example, a consultant can choose to differentiate between different types of services to know what is most profitable for you.

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Project

For someone who works a lot in project form, it can be useful to use cost centers to get figures on how different projects are doing financially. It can be especially useful for someone who runs multiple parallel projects.

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A company with few employees

In a company with few employees, each employee can be a cost center, this way you can see how much each employee generates.

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In summary, most companies have something to gain from using cost centers in their accounting.

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Get full control of your business with Bokio!

With Bokio, you can create as many different cost centers as your business needs. With accounting, invoicing, payroll management, business account and automated reports, it's easier than ever to get full control of your finances!

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Read more about Bokio

Holiday times are in full swing and summer has so far offered a mix of sun, rain and positive macroeconomic news. But what does it really mean for you as an entrepreneur and what can you expect going forward?

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At last, inflation is falling

Inflation in Sweden has fallen continuously since the peak in December 2022. However, May offered disappointment when the inflation figure was unchanged from April and higher than estimated. June, on the other hand, brought some really positive news. After being above the Riksbank's target of 2 per cent in late August 2021 landed inflation of 1.3 per cent According to the CPIF which is the measure the Riksbank goes by. A figure that was lower than both the Riksbank and the market forecast.

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This is positive news for entrepreneurs on several fronts. Inflation leaves customers at risk of pulling down on deals as their overheads increase. But it also affects entrepreneurs in the same way that it affects consumers, where high inflation leads to increased costs for the purchase of both goods and services. More price-sensitive customers at the same time as you suffer from cost increases is a difficult balancing act, but the fact that inflation is now falling will hopefully lead to the situation moving more towards normal.

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Bankruptcies are decreasing

Another positive message from the summer was that credit reporting company UC reported that Bankruptcies decreased for the first time in two years. Bankruptcies, however, remain at record levels seen for the year as a whole, but a reduction instills optimism for the second half of the year. Just as inflation affects in several ways, bankruptcies do so with it. Reducing the number of bankruptcies therefore has a positive impact on the entire food chain.

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The key interest rate will be lowered

The Riksbank has so far this year lowered the key interest rate by 0.25 per cent in May and in recent monetary policy. The decision signalled that there could be three more cuts this year. The consensus among economic analysts is that there will be between two and four cuts this year and the majority of big banks believe the first occurs as early as August. The fact that the key rate is being cut is a relief for both households and businesses that have been squeezed by the high levels of interest rates.

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What does it mean for entrepreneurs?

The fact that inflation is falling, bankruptcies are decreasing and the key interest rate is a positive thing for society as a whole. As an entrepreneur, it also means that you can hopefully start to exhale after the tough period that has been. When the key interest rate falls, the purchasing power of the community increases and as an entrepreneur, you can expect sales to pick up again. The cuts will also have an effect on several levels. As interest rates decrease, your suppliers' costs will fall, which is likely to have positive effects on your purchase prices.

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In the long run, reductions in the key interest rate will also lead to a reduction in financing costs for companies, which have a certain lagging effect compared to variable mortgages. The cost of investing in your business will therefore drop it by. All in all, the positive news of the summer means that you as an entrepreneur can start looking more hopefully towards the future and go into autumn with optimism.

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Right now, a fraud attempt is underway in which someone calls from hidden number, pretending to be Froda, urging to settle loans prematurely. The calls are not from Froda and we urge you to hang up if someone calls and asks you to settle your loan ahead of time.

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It happens that Froda calls out to you as a customer. However, when we call, we never do it from a hidden number. We will also never ask you to identify when we call or urge you to settle your loan early. If you receive a call or text asking you to settle your loan early, we urge you to contact our support.

In 2020, the Swedish Tax Agency introduced a temporary possibility of deferral of tax payments to support entrepreneurs who suffered financially during the pandemic. The aid has been extended in instalments but on 12 September this year it is time to start cashing in the tax. This is something that can cause problems for companies that do not apply for installment payments on time.

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The corona pandemic was tough on society at large but one group that was hit particularly hard was the country's business owners. While revenues slowed down, or at worst stopped off entirely, costs were made up. Therefore, a series of measures were introduced to help entrepreneurs financially during a deferred period. One of these measures was that the Swedish Tax Agency introduced a temporary reprieve which gave the possibility to defer payment of employer contributions, deducted tax and VAT.

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How the forbearance worked

The waiver could be applied for the accounting periods January 2020—January 2021, October to December 2021 and April to June 2022 and was divided into several levels. At the initial stage, companies could apply for a grace period of up to 12 months, but at the latest until 12 September 2023 (17 January 2024 for companies that report VAT once a year). After that, companies could apply for an extension of grace for up to a further 12 months until 12 September 2024 (17 January 2025 for companies that report VAT once a year). Thus, depending on when companies applied, they have been able to obtain a grace period of up to 24 months for the tax payments.

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It happens when the forbearance expires

When a company has had a temporary grace period of 24 months, or shorter if limited by the closing dates, it will have to pay the deferred tax. The Swedish Tax Agency sends out information about 30 days before the end date of the deferral with information about when the money is due and how much interest and fee will be added (the grace was not free of charge, but there will be interest on expenses and a grace fee). For all companies with monthly or quarterly accounts that applied for an extension of the forbearance beyond 12 September 2023, this will be around 12 August.

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Postponement can be paid in part

Fortunately, the vast majority of companies do not have to pay the full amount in one fell swoop. When the extended grace period expires, companies may apply to extend the period of grace for up to 36 more months, provided that an installment plan is established. However, in order to apply for an installment plan, the company must have had a temporary grace period of 24 months, or as far as possible if limited by the end dates.

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The instalment can be divided into at least two instalments and a maximum of 36 instalments over a period of maximum 36 months. However, the bulk of the repayment must occur during the first part of the installment plan.

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Read more about the temporary deferral of tax payments and how to apply for an installment plan at Swedish Tax Agency's website.

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Starting a business is an exciting but demanding journey. With preparation, planning and a balanced approach, you can navigate the challenges and build a successful business. In Sweden, with its supportive business climate and strong culture of innovation, there are great opportunities for entrepreneurs to establish and develop businesses. This guide will give you an overview of what you should consider when starting a business.‍‍

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Develop a business idea

The first step in starting a business is to have a clear and feasible business idea. Identify the needs and behaviors of your potential customers, current trends and potential niches. An effective method is to conduct market research or focus groups to test the impact of your idea. Don't be afraid to adapt your idea based on feedback and new insights. A flexible and responsive approach can be the difference between success and failure.

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Choose business structure

Your choice of business structure when starting a business affects everything from tax management to how you can scale up. It is therefore not just a matter of feeling, but you should choose the business structure that best suits your business. An individual company is suitable if you run the company yourself and if the business is small to begin with. An individual firm offers simplicity and complete control, but carries personal responsibility for liabilities and risks. Limited liability companies offer legal separation between the company and personal finances, but require more administration and a start-up capital. Understand the differences and risks of each business structure to choose the one that best suits your company's long-term goals.

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Your choice of business structure affects everything from tax management to how you can scale up your business. Understand the legal and financial implications of each form, from individual firm to limited liability company. Consider your long-term business goals and choose a structure that supports both your current situation and future growth.

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The choice of business structure is one of the first decisions faced by aspiring entrepreneurs and affects everything from administration and tax management to boundaries between the company and you as an entrepreneur.

In Sweden, there are essentially four forms of business if you want to start a business. Each type has its respective advantages and disadvantages and is therefore suitable for different types of activities.

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• Sole trader: For the solo business owner who runs a small business. It is easy to start and does not require any start-up capital. However, you are personally liable for all of the business's liabilities and legal obligations, which may involve a higher personal risk.
• Limited companies: Suitable for larger businesses that have a higher level of risk, if you need to raise external capital or if you want to separate the business's finances from your personal ones. To start a limited company, you and your potential co-founders, must enter with a share capital of at least 25,000 SEK.
• Trading partnership: Suitable for businesses where two or more people want to operate together. All owners are jointly and severally liable for the liabilities of the business.
• Limited partnership: Similar to trading partnerships but has two types of shareholders: general partners who are active in the company and have full responsibility and limited partners who are co-financiers but only risk their stake in the company. This is a good option for those who want investors without giving them full responsibility.

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Consider which business structure best suits your business goals, risk tolerance, and long-term plans. For some, it can be beneficial to start the company as an individual firm and then transform the business into a limited company as the company grows while limited companies from scratch are better suited for others. It may also be wise to consult with a legal or financial advisor before deciding which business structure to choose.

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Register the business

After choosing the business structure, the next step is to register the company. This includes registering with the Swedish Companies Registration Office and the Tax Agency, as well as making sure that you have all possible licenses and permits in place. It is also important to establish solid accounting and bookkeeping from the start, and it can be beneficial to bring in an accountant or bookkeeper to manage finances if you do not want to or can do it yourself. Also pay attention to trademark protection and intellectual property rights if your business idea includes unique products, services or technologies when starting your business.

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‍Make a financial plan

Well thought out financial planning is fundamental when starting a business. This includes not only securing initial financing but also creating a sustainable economic strategy for the future that includes pricing strategy, cost control and investment. Set a realistic budget that includes both fixed and variable costs as well as potential sources of income. Keep track of your cash flows and be prepared to make adjustments if necessary. A robust accounting system and regular financial review are recommended to help you better understand your business's financial health and be able to make informed decisions.‍

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Develop a marketing strategy

Marketing is crucial to building a brand and attracting customers. Like anything else, it's easier to succeed in marketing if you have a set strategy for how you want to work with it right from the moment you start your business. A marketing strategy aims to build a strong brand that communicates your unique value proposition and should include a combination of digital marketing, content marketing, keyword optimization, and if possible, traditional marketing. Be consistent in your marketing across all platforms and try to build a strong social media presence to interact directly with your target audience. Evaluate and adapt your strategy based on measurable results and customer feedback.

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‍Plan for scalability

The long-term success of your business depends on your ability to scale and adapt the business. To succeed, you need to have a clear vision for how your business can evolve over time. This includes not only product development and market expansion, but also investing in personnel, technology and scalable processes to cope with increased demand and complexity. Being proactive makes it easier to react quickly to market changes and new opportunities.

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Starting a business is a process that requires patience, perseverance and a willingness to constantly learn and develop. By planning ahead, being persistent and continuously evaluating and adapting your strategy, you can build a strong foundation for your business and achieve long-term success.