What is an invoice?

An invoice is a formal, legally binding document that a seller issues to a buyer to request payment for goods or services. It serves as a key document in accounting and is the basis for the correct recording of sales revenue and value added tax . Invoices play a critical role in procurement processes , where correct invoice processing is essential for good supplier management.

Section 1: The Anatomy of the Invoice

In Norway, the content of an invoice is regulated by the Accounting Regulations. For an invoice to be valid, it must contain a number of mandatory information.

Statutory Content Requirements:

1. Invoice number: A unique, machine-assigned number that is part of a continuous series.
2. Invoice date: The date the invoice is issued.
3. Seller's Name and Organization Number: Clear identification of the seller. If the seller is VAT registered, "VAT" should be placed after the organization number.
4. Buyer's Name and Address: Clear identification of the buyer.
5. Description of the Product/Service: A clear and unambiguous description of what has been delivered.
6. Time and Place of Delivery: When and where the goods/service were delivered.
7. Price and VAT: The amount specified in Norwegian kroner, with VAT stated in kroner and at the current rate.
8. Total amount: The amount to be paid.
9. Payment deadline: Due date for payment.

Section 2: Different Types of Invoices

Although the standard sales invoice is the most common, there are several types of invoices used in different situations. In modern retail, invoices and receipts are often generated automatically through computerized cash registers (cash registers) , which ensure correct documentation and automatic integration with the accounting system.

2.1 Sales Invoice

This is the most common type and is a direct claim for payment for a delivered good or service. It triggers an income in the seller's accounts and an expense in the buyer's accounts.

2.2 Credit Note

A credit note is a "negative invoice". It is issued to correct, reduce or cancel a previously sent invoice. This may be applicable in the case of a return of goods, a price reduction, or if there was an error in the original invoice. A credit note must always refer to the invoice number it corrects.

2.3 Proforma invoice (Pro Forma Invoice)

A pro forma invoice is not a true invoice, but a preliminary document or quotation sent to a customer before a transaction is completed. It is often used in international trade to declare the value of goods for customs clearance, or to request an advance payment . A pro forma invoice should not be recorded as revenue, as it does not represent an actual sale. A similar, but distinct, method of advance payment is on-account payment , which is often used for ongoing services with variable consumption.

Section 3: Invoice Processing and Certification

After an invoice is received through the document receiving department , it must go through a verification and approval process before it can be posted and paid. This process is called attestation and is a critical part of a company's internal control.

Checkpoints for Invoices

Before an invoice is approved, the following checks must be performed:

• Factual check: Is the product or service actually delivered as described?
• Accounting control: Is the invoice correctly booked and VAT processed?
• Financial control: Is the purchase within budget and authorizations?

Correctly certifying invoices ensures that the company only pays for goods and services that have actually been received, and that all transactions are correctly documented in the accounts. This is particularly important for maintaining good internal control and for satisfying auditors' requirements for documentation.

Section 4: Payment Methods for Invoices

After an invoice is certified and approved, it must be paid by the due date. There are several payment methods available for both individuals and businesses:

Automatic Payment Solutions

For recurring invoices, automatic payment solutions can save time and reduce the risk of forgetting:

• AvtaleGiro : The most widely used solution for automatic payment of invoices in Norway. The amount is automatically deducted from the bank account on the due date.
• eInvoice: Electronic invoice received directly in the online bank, where the customer must approve each payment manually.

These electronic payment services are regulated by the Payment Services Directive (PSD2) , which ensures the safe and innovative development of digital payment solutions.

Manual Payment Methods

• BankGiro : Traditional payment via online banking or bank branch with OCR number for automatic reconciliation
• Vipps Bill: Modern mobile-based payment solution

The choice of payment method depends on the invoice type, amount and desired level of control. For fixed, recurring invoices such as rent and insurance, AvtaleGiro is often the most practical solution.

Section 5: Follow-up on Unpaid Invoices

When invoices are not paid by the due date, the company must implement systematic follow-up to ensure payment. This is a critical part of customer follow-up and directly affects the company's ability to pay .

Payment reminders

The first and most important follow-up method is to send payment requests . These are formal requests for payment that must follow specific legal requirements:

• First reminder: Usually sent 30 days after the due date with a polite tone
• Second reminder: Stricter wording with higher reminder fee
• Third reminder: Includes threat of debt collection or legal action

Consequences of Non-Payment

When invoices remain unpaid, this can lead to:

• Late payment interest: Statutory interest that accrues from the due date.
• Reminder fees: Compensation for administrative costs of follow-up
• Debt collection process: Transfer to professional debt collection companies
• Bad debt losses: Write-down or write-off of uncollectible amounts

Effective follow-up of overdue invoices is essential to maintaining good cash flow and minimizing receivables losses. Read more about the complete process in our guide to payment requests .