- Original Poster
- #1
Hi there, hope you can help with the following scenario. We sell widgets and for the purpose of this example, lets use wardrobes as an example with a value of £100 each.
Our USA customer orders 8 widgets and pays a 40% deposit (i.e. we receive £320). My first question is whether a commercial invoice for the full order value (i.e. £800) is to be generated the day this deposit hits our bank account (in line with HMRC advice on 'time of supply' etc.)?
Once generated, we file this invoice in our 'Sales' folder (we have a rudimentary accounting system comprising of 3 folders: Sales, Purchases & Expenses)
For whatever reason, the widgets (wardrobes) are partially shipped as 5 separate shipments (incoterms are EXW). Each shipment comprises of varying quantities of parts/drawers/bolts etc. so that by the time the beneficiary receives all 5 shipments, they'll have all the bits/parts for 8 wardrobes.
Each shipment must ofcourse be accompanied with a 'shipping invoice' which FedEX or DHL require. Attaching the above invoice to each shipment would imply we've exported goods worth 5 x £800 and also the buyer paying duties/taxes in their jurisdiction on the same amount - which is ofcourse incorrect.
How are we to go about amending/creating invoices for these 5 shipments bearing in mind all exports will be recorded in CHIEF against our VAT/EORI number? Should we create 5 separate itemized proformas based on the quantity of parts being sent? The value of these 5 x proformas would no doubt have to match the 1 true commercial invoice - but this is not possible as we don't have a itemized break down of each component either (we purchase these wardrobes from our suppliers in the UK and they arrive as several parts across several packing slips).
Some book-keepers have suggested the question/scenario is incorrect as we're invoicing for wardrobes but later exporting parts. They suggest itemizing whats truly being sent but for the reason given above, this isn't possible.
Finally, if we do create proformas, where/how are they filed? Do they have any accounting significance? I know HMRC needs to see 'proof of export' so are they just to be stapled to the 1 main commercial invoice (along with Airway Bills etc.) and kept for possible HMRC inspection?
Please advise - the wardrobes example is terrible but you get the idea.
Thank you.
Our USA customer orders 8 widgets and pays a 40% deposit (i.e. we receive £320). My first question is whether a commercial invoice for the full order value (i.e. £800) is to be generated the day this deposit hits our bank account (in line with HMRC advice on 'time of supply' etc.)?
Once generated, we file this invoice in our 'Sales' folder (we have a rudimentary accounting system comprising of 3 folders: Sales, Purchases & Expenses)
For whatever reason, the widgets (wardrobes) are partially shipped as 5 separate shipments (incoterms are EXW). Each shipment comprises of varying quantities of parts/drawers/bolts etc. so that by the time the beneficiary receives all 5 shipments, they'll have all the bits/parts for 8 wardrobes.
Each shipment must ofcourse be accompanied with a 'shipping invoice' which FedEX or DHL require. Attaching the above invoice to each shipment would imply we've exported goods worth 5 x £800 and also the buyer paying duties/taxes in their jurisdiction on the same amount - which is ofcourse incorrect.
How are we to go about amending/creating invoices for these 5 shipments bearing in mind all exports will be recorded in CHIEF against our VAT/EORI number? Should we create 5 separate itemized proformas based on the quantity of parts being sent? The value of these 5 x proformas would no doubt have to match the 1 true commercial invoice - but this is not possible as we don't have a itemized break down of each component either (we purchase these wardrobes from our suppliers in the UK and they arrive as several parts across several packing slips).
Some book-keepers have suggested the question/scenario is incorrect as we're invoicing for wardrobes but later exporting parts. They suggest itemizing whats truly being sent but for the reason given above, this isn't possible.
Finally, if we do create proformas, where/how are they filed? Do they have any accounting significance? I know HMRC needs to see 'proof of export' so are they just to be stapled to the 1 main commercial invoice (along with Airway Bills etc.) and kept for possible HMRC inspection?
Please advise - the wardrobes example is terrible but you get the idea.
Thank you.
