How do I describe invoices for the accountant?

Regardless of its legal form, every organisation is obliged to keep its accounting records correctly. Invoice description is a key element of financial documentation, enabling the expense to be recorded correctly and confirm its conformity with the accounting regulations. How do I describe invoices for the accountant? In this article, we explain how to correctly describe invoices for the accountant in order to avoid errors and ensure compliance with legal and accounting requirements.

How do I describe invoices for the accountant?

How do I describe invoices for the accountant? If the invoice/receipt is issued on the basis of a concluded agreement, the number and/or date and value of the document must be indicated. If the name of the service or goods entered in the invoice is not precise, the type of purchase service/goods must be described in such a way that the item can be clearly classified.

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What is an invoice (accounting document)?

An invoice is the basic accounting document which confirms a transaction between its parties. It can be drawn up electronically or in a printed form and it includes details of the seller, the buyer, the subject of the sale and the amount to be paid to the specified bank account.

Basic invoice data

• Name and address of the partner
• Tax identification number NIP (if applicable)
• Invoice issue date
• Invoice number
• Gross and net amounts
• VAT amount (if applicable)
• Description of goods or services

Why is the invoice description important?

The description of the invoice must leave no doubt regarding:

• expenditure classification,
• its funding source,
• compliance with statutory objectives (in the case of foundations and associations),
• correct entry in the accounting books.

Incorrectly described documents can lead to billing errors, tax issues and complications during audits.

How to describe invoices for the accountant? Rules for describing invoices

To facilitate accounting management, each invoice should be described according to the facts, indicating i.e. the purpose of the expense, the contract number (if applicable) and the funding source. The description should be clear and unambiguous, allowing the document to be recorded correctly. It is a good idea to provide descriptions on an ongoing basis and use the hints provided by the company’s internal procedures or the accounting department.

Invoice description elements 

The invoice description should include the following information:

1. Purpose and justification of the purchase

The description of the invoice should clearly specify what the expense was used for and how it fits into the activities of the organisation or the company.

2. Accounting assignment

• Invoice accounting number according to the account plan
• Cost classification (e.g. administrative, operational, investment costs)
• Information on the financing of the expenditure (e.g. from own resources, grants, sponsorship)

3. Signatures and approval

In the case of invoices, the document must be signed by persons responsible for financial matters in the organisation, e.g. the treasurer or accountant.

Examples of correct invoice descriptions

Example 1: Purchase of office supplies

Description: “Purchase of office supplies for the daily operation of the organisation’s office. Expenditure funded from own resources. Classification: 402-1.”

Example 2: Fee for accounting services

Description: “Accounting services for February 2024. The expenditure was accounted for under administrative expenses. The invoice has been supplemented with the accounting number 401-3.”

Printed and electronic invoices

Invoices can be provided in a printed form or electronically (e.g. in the PDF format). In the case of electronic invoices, it must be ensured that they are stored correctly in the accounting system.

Foreign invoices

In the case of foreign invoices, additional requirements apply, e.g. conversion of the amounts into PLN and VAT billing in accordance with the regulations on international transactions.

More tips from the experts

How to efficiently prepare invoices for accounting? To avoid chaos and to close the month efficiently, it is a good idea to develop an invoice management system. Here are 7 key steps:

1. Divide invoices – into expenses, sales and delegations.
2. Arrange the invoices chronologically – from the 1st to the last day of the month.
3. Describe and stamp – each invoice should be stamped as “RECEIVED” and have an accounting description.
4. Enter in the register – keep a systematic list of invoices.
5. Archive the scans – store digital copies for easy access.
6. Complete the cash report – if you handle cash, record the transactions.
7. Include a bank statement – provide a full statement of income and expenditures.

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If you are looking for an experienced accountancy firm which is going to take comprehensive care of your company’s accounting, use the offer of our EFEKTA office. We offer professional support in the preparation of accounting documents, tax settlements and bank account services. 

We specialise i.e. in accounting of limited liability companies or accounting of transport companies. 

Our team provides substantive oversight of the finances of our clients, helping them to make the right decisions in line with current legislation. Contact us and we will be happy to provide answers and tailor our solutions to your needs.

How do I describe invoices for the accountant? Summary

Correct invoice descriptions are a key element of proper accounting in an organisation. Each invoice should be accurately described, approved and delivered in the correct form. This will avoid accounting and tax-related issues and ensure that financial records comply with legal requirements.

Use the services of our office!

Are you looking for a professional accountancy firm which can also take care of the proper storage of your accounting documents? Write to us at biuro@efekta.waw.pl or find out more at – EFEKTA accountancy firm.

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