Invoice checklist for freelancers

Guide · 6 minute read

An invoice that is missing a field does not fail loudly. It sits in the customer's accounts payable until someone notices, and then it comes back to you a month later with the payment still unmade. Here is what has to be on it.

Every tax invoice carries

• The words חשבונית מס, tax invoice, printed on the document.
• Your business name and your dealer number, מספר עוסק.
• A serial number from a sequence with no gaps.
• The issue date.
• The customer name, and their dealer number when they are a business.
• A description of what was sold, specific enough to identify it.
• The amount before VAT, the VAT amount and the rate, and the total.
• An allocation number, when the invoice is above the threshold that requires one.

An exempt dealer issues a different document. No VAT line, no tax invoice heading, and the wording that identifies the business as עוסק פטור. See the VAT guide for which status applies to you.

Invoice, receipt, or both

A tax invoice records the sale. A receipt, קבלה, records the money arriving. They are separate documents doing separate jobs, and the combined form, חשבונית מס קבלה, exists for the common case where both happen at the same moment.

The practical rule is about cash accounting. If you invoice on delivery and get paid 45 days later, those are two documents on two dates. If the customer pays on the spot, one combined document is correct and simpler.

Five mistakes that cost time

Numbering that skips

Sequences have to be unbroken per document type. A cancelled invoice does not free its number for reuse. If you issued 1044 by mistake, you issue a credit note against it, and the next invoice is 1045. Deleting the row and reusing the number is the version that causes trouble in an audit.

Editing after issue

An issued invoice is final. Wrong amount, wrong customer, wrong date, all of them are fixed by issuing a credit note and then a correct invoice. Spreadsheet based invoicing makes this easy to get wrong because nothing stops you from opening the file and changing a number.

Missing the customer dealer number

Business customers need it to claim their input VAT, and larger companies run automated checks that reject documents without it. Ask for it once when you set up the customer and store it.

A description that says services

One word does not identify what was sold. Write what a stranger reading the invoice in three years would need in order to know what happened. Consulting, October, 12 hours is a description. Services is a placeholder.

Sending a PDF you generated by hand

The document itself may look right, and the numbering, the archive and the allocation number are what fail. This is the gap between the generator on this site, which is fine for a quote or a proforma, and software that issues real fiscal documents.

Before you send

1. Read the customer name and dealer number against their own paperwork, not your memory.
2. Check that the total on the invoice matches the amount you agreed, including or excluding VAT as agreed.
3. Confirm the date is the date of the transaction, not the date you got around to typing it.
4. Send it to the person who pays, and copy the person who ordered.

The credit note, properly

A credit note, חשבונית זיכוי, is the only correct way to undo an issued invoice. It is a document of its own, with its own number in its own sequence, and it references the invoice it cancels. Full cancellation and partial correction both work the same way: issue the credit for the amount being reversed, then issue a fresh invoice if a corrected one is needed.

Two rules make the difference between a clean file and an awkward conversation later. The credit note belongs to the period you issue it in, not the period of the original invoice, so a January invoice credited in March affects the March return. And the customer needs the credit note too, because until they have it their books still carry your original invoice and their input VAT claim no longer matches anything you reported.

Invoicing a customer abroad

Exported services are generally zero rated, which means an invoice with no VAT on it and full input VAT recovery on your side. The document still has to be a proper tax invoice with every field it normally carries, and the VAT line reads zero rather than being absent.

You can bill in a foreign currency, and your books are still in shekels, so the transaction is recorded at the rate on the invoice date. The gap between that rate and the rate on the day the money lands is an exchange difference, not a change to the invoice, and it does not entitle you to reissue anything. Keep the evidence that the customer is a foreign resident and that the service was consumed abroad, because that evidence is what supports the zero rate if anyone asks.

What actually gets you paid faster

1. Agree the payment term in writing before the work. Israeli business terms are commonly current month plus 30, 45 or 60 days, and that plus is where a month quietly disappears. Current month plus 60 on an invoice dated the second of the month is nearly three months.
2. Invoice on the day you deliver. The clock usually starts at the invoice date, so a week of delay on your side is a week added to the wait, not subtracted from it.
3. Send it where the payments actually happen. Larger companies pay from an accounts payable inbox, not from your contact's personal mail. Ask once, and send there with your contact copied.
4. Get the purchase order number on the invoice if the customer uses them. Without it the document sits in a queue that nobody is responsible for clearing.

None of that is chasing. Chasing is what you do after the process failed, and most of it is avoidable by getting four details right at the start.

Your own copy

Issued documents are kept for seven years, and the copy has to be the document as issued rather than something your system can regenerate from today's settings. If your customer address changed last year, regenerating an old invoice would silently produce a different document from the one you sent, and that is exactly what the rule exists to prevent. Anything that stores invoices as spreadsheet rows plus a template has this problem whether or not anyone has noticed.

General information, not tax advice. Confirm your own status and current thresholds with your accountant.