Advance invoice

Advance invoice – free template

An advance invoice is a document that records the receipt of an advance, deposit, or prepayment from a customer. It confirms each part-payment separately, while relating to a single transaction or contract. It's used only when you need to account for advances received toward future deliveries of goods or the provision of services.

An advance VAT invoice is one of the most commonly used documents in business — especially in industries where payments are made in stages or in advance. It lets a business correctly document the funds received and settle VAT in line with the applicable law.

Download the free advance invoice template prepared by TaxCoach's specialists. The advance invoice template, in XLSX format, is ready to fill in, easy to read, and compliant with current tax law. It's a practical solution for business owners who want to issue accounting documents quickly and correctly, without the risk of errors.

 

When can an advance invoice be issued?

An advance VAT invoice is issued once at least part of the payment has been received from a buyer who pays an advance before the transaction takes place. This applies when payment is made before:

• the sale,
• the delivery of goods or performance of a service,
• intra-Community distance sales of goods (except under the so-called EU procedure).

Under Article 19a(8) of the Polish VAT Act, the VAT tax obligation arises at the moment full or partial payment is received. This means every advance received must be documented by issuing an advance invoice.

In practice, this means that even a partial payment — say, 10%, 30%, or 50% of the order value — requires the appropriate accounting document to be issued.

An advance invoice is issued:

• no later than the 15th day of the month following the month in which full or partial payment was received,
• no earlier than 60 days before full or partial payment is received.

Meeting these deadlines is essential for settling VAT correctly and avoiding possible tax penalties.

 

When can't an advance invoice be issued?

An advance VAT invoice can't always be issued. The law sets out specific exceptions where receiving an advance doesn't trigger the tax obligation. In these cases, there's no requirement to document the payment with an advance invoice.

These exceptions include, among others:

• intra-Community supply of goods (ICS),
• the supply of goods through the transfer of a single-purpose voucher,
• the supply of electricity, heating or cooling, and piped gas,
• the provision of energy distribution services,
• the provision of telecommunications services,
• the provision of services listed in Annex 3 to the Polish VAT Act,
• rental, lease, and similar services,
• personal and property protection services,
• ongoing legal and office support services.

In these cases, the tax obligation arises under different rules, so an advance invoice isn't required.

 

What must an advance VAT invoice include?

An invoice documenting the receipt of an advance must include all the elements required by the VAT Act. Getting the document's formal requirements right is essential for its validity and for the buyer's ability to deduct the tax.

An advance invoice should include:

• the issue date,
• the sequential invoice number,
• the seller's and buyer's details (names and addresses),
• the seller's and buyer's NIP numbers,
• the date payment was received (if different from the issue date),
• the amount of payment received (the advance),
• the amount of VAT on the payment received,
• information about the order or contract, including the name of the goods or service, their quantity, net value, VAT rate, and the gross value of the whole transaction.

If several advance invoices are issued for a single transaction (for example, with staged payments), the last invoice should list the numbers of all the earlier documents. This keeps the documentation consistent and makes later settlements easier.

 

Advance invoice vs. final invoice

The advance invoice and the final invoice are closely linked and together give a complete picture of how a transaction was settled. In many cases, once the delivery of goods or the performance of a service is complete, a final (settlement) invoice has to be issued.

If the advance invoice doesn't cover the full order value, the final invoice must:

• reduce the value of the goods or services by the advances already received,
• reduce the VAT amount by the VAT already shown on the advance invoices.

It's worth remembering, though, that issuing a final invoice isn't always mandatory. If the advance (or the total of several advances) covers 100% of the order value, there's no need to issue an additional document — the last advance invoice then serves as the final invoice.

The same applies when several advance invoices have been issued that together cover the full payment. In that case, the last invoice should reference the earlier documents.

In addition, if the advance is received and the transaction is completed in the same month, the business can skip the advance invoice and issue only the final invoice.

 

Download the free advance invoice template (XLSX)

Using ready-made accounting document templates speeds up your work significantly and minimizes the risk of errors. Our free advance invoice template in XLSX format makes it easy to prepare a correct document that meets all the formal requirements.

It's an ideal solution for business owners, freelancers, and accounting firms who want to streamline their invoicing process and be confident it complies with the law.

 

Need accounting support?

Need help issuing advance invoices? Or want to make sure whether, in your situation, you can skip the final invoice, or how to settle VAT correctly?

Get in touch with us and make use of TaxCoach's expert support. We provide professional accounting services, tax advisory, and help with your company's ongoing settlements.