Results 1 to 6 of 6

Thread: PRO FORMA INVOICES FROM SUPPLIERS

  1. #1
    New Member
    Join Date
    Nov 2015
    Location
    St Francis Bay
    Posts
    5
    Thanks
    0
    Thanked 0 Times in 0 Posts

    PRO FORMA INVOICES FROM SUPPLIERS

    When making a purchase (on behalf of the company) I find that many suppliers provide a pro forma invoice and say that when payment for the purchase has been received, they will provide a full tax invoice. However, in many cases, after payment has been made, the promised tax invoice is not forthcoming, and one has to chase and chase to get it. One must have a tax invoice to be able to claim the VAT refund. It is annoying and a waste of my time. Perhaps I should insist of a tax invoice before payment?

  2. #2
    New Member
    Join Date
    Apr 2018
    Location
    Durban
    Posts
    6
    Thanks
    0
    Thanked 0 Times in 0 Posts
    Hi Skipper. Yes that is a familiar story. You can insist on a proper Vat invoice before payment. After payment the Suppliers often get very forgetful about issuing an invoice!

  3. #3
    Diamond Member Mike C's Avatar
    Join Date
    Apr 2012
    Location
    Umkomaas
    Posts
    2,726
    Thanks
    231
    Thanked 355 Times in 311 Posts
    Hi Skipper,

    I have also experienced this frustration. Interestingly enough there is an instruction from SARS in the Guide for Vendors that says:

    (Chapter 11.3)
    • A vendor must issue a tax invoice to the recipient within 21 days of the supply having been made where the consideration for the supply exceeds R50 (whether the recipient has requested this or not).
    When I have spoken to the supplier that insists on issuing a Pro-Forma Invoice they say that it is because the Tax Invoice is linked to their inventory. I can understand that ... but still don't know why they still are so slow in issuing it after the purchase has been made.
    People will forget what you said, people will forget what you did, but people will never forget how you made them feel. - Maya Angelou

  4. #4
    Full Member EAB's Avatar
    Join Date
    Jun 2016
    Location
    Roodepoort
    Posts
    88
    Thanks
    0
    Thanked 13 Times in 12 Posts
    Mike C,

    Agree, it is linked to inventory, but by not issuing an invoice they will sit with an customer in credit and with their inventory not balancing. Also not sure why they don't issue the invoices as it causes their books not to balance.

    Maybe ask for an statement of your account and show the supplier your account is in credit and they owe you money
    Wisdom is to do now what you will be satisfied with later

    https://erasmusw.wixsite.com/e-ab

  5. #5
    Diamond Member Justloadit's Avatar
    Join Date
    Nov 2010
    Location
    Johannesburg
    Posts
    2,915
    Thanks
    108
    Thanked 593 Times in 503 Posts
    Blog Entries
    1
    Quote Originally Posted by EAB View Post
    Mike C,
    Also not sure why they don't issue the invoices as it causes their books not to balance.
    It has something to do with fraud.
    Customer requests an invoice for goods, the supplier issues said invoice, then the customer does not pay, but uses the invoice in his VAT return where he claims the VAT.
    The supplier waits for payment, and the invoice gets reflected on the VAT as output, and pays SARS the VAT.
    Supplier may then create a credit note to cancel the issued invoice, and claim the VAT back from SARS at the next VAT period.

    Customer simply ignores the Credit note, and does not create a debit note in his accounting system, and now has a profit for the value of the VAT, with out having made a purchase.

    Not legal, but a very easy way to get VAT back.
    Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
    Solar and LED lighting solutions - www.microsolve.co.za

  6. Thanks given for this post:

    Andromeda (28-May-18)

  7. #6
    Bronze Member
    Join Date
    Feb 2018
    Location
    Pietermaritzburg
    Posts
    116
    Thanks
    7
    Thanked 2 Times in 2 Posts
    Quote Originally Posted by Justloadit View Post
    It has something to do with fraud.
    Customer requests an invoice for goods, the supplier issues said invoice, then the customer does not pay, but uses the invoice in his VAT return where he claims the VAT.
    The supplier waits for payment, and the invoice gets reflected on the VAT as output, and pays SARS the VAT.
    Supplier may then create a credit note to cancel the issued invoice, and claim the VAT back from SARS at the next VAT period.

    Customer simply ignores the Credit note, and does not create a debit note in his accounting system, and now has a profit for the value of the VAT, with out having made a purchase.

    Not legal, but a very easy way to get VAT back.
    I concur with this reasoning. One finds most of the larger businesses will only issue a pro-forma invoice unless you have an account with them. We see this all the time where the creditors clerk at the customer does not follow up on their tax invoices. Sometimes months later they are chasing up after internal audit perhaps raised the alarm.

Similar Threads

  1. Pastel Software - Suppliers invoices
    By CarlaMc in forum Accounting Forum
    Replies: 5
    Last Post: 26-Mar-19, 01:24 PM
  2. [Question] Processing of Supplier invoices directly to Customer invoices
    By Oeloff in forum Accounting Forum
    Replies: 3
    Last Post: 09-Nov-17, 03:06 PM
  3. [Question] Pastel Supplier Invoices Matching - Remove Credited Invoices
    By steffie250 in forum Accounting Forum
    Replies: 6
    Last Post: 10-Mar-15, 01:23 PM
  4. Motor suppliers
    By AndyD in forum Electrical Contracting Industry Forum
    Replies: 3
    Last Post: 14-Mar-13, 10:33 AM
  5. [Question] Can't pay suppliers
    By Conan in forum General Business Forum
    Replies: 10
    Last Post: 22-Sep-09, 05:10 PM

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •