Invoice book

What it means

An invoice book is a register of issued and received invoices, recording for each the number, issue and due dates, partner, amount and payment status. In single-entry bookkeeping it is one of the mandatory books alongside the cash journal.

It is often kept as two books: an outgoing invoice book giving an overview of receivables and an incoming invoice book giving an overview of payables. Together they show who owes the company and whom it owes, which the cash journal alone does not.

In double-entry bookkeeping this role is played by the subledger, the analytical record of receivables and payables by partner and document. A sole trader on flat-rate expenses uses it as part of their tax records.

How it works in practice

For clients on single-entry bookkeeping we keep the invoice book in accounting software linked to bank statements, so payments are matched automatically. An overview of overdue unpaid invoices is then available at any time, not just at year end.

At year end the invoice book supports the stocktake of receivables and payables. In single-entry bookkeeping they do not normally affect the tax base, but they do when the accounting method changes or the business ends, and the invoice book is the basis for that.

The outgoing invoice book also drives debt collection: when to send a reminder, when a letter before action, and when to consider a write-off. For VAT payers the book must match the control statement.

What to watch out for

The most common mistake is keeping the invoice book separately from the books and not updating payments. The company then does not know who really owes it money, sends reminders to those who have paid and overlooks unpaid invoices until they become time-barred.

A missing number in the series of issued invoices or a cancelled invoice without a document raises questions at an audit. Cancelled invoices therefore stay in the book with a note and a corrective document so that the number series is complete.