How do I modify or cancel an unpaid invoice?

It takes a great deal of rigor to draw up an invoice properly... but mistakes are human. That's why every supplier has to cancel an unpaid invoice. The procedure may seem simpler than when the invoice has already been paid, but it must be done in such a way as to comply with French legislation.

So, how do you legally cancel a supplier invoice for accounting purposes? We tell you all about it.

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When to modify or cancel a supplier invoice?

There are several reasons for cancelling or modifying an invoice already sent to the customer:

• an error has been made on the amount ;
• the document does not comply with standards (lack of mandatory information, for example);
• the invoice is double-accounted;
• you finally wish to grant the customer a discount after sending the document, etc.

On the other hand, an invoice can only be cancelled if the billing error causes ambiguity and has a significant impact. No need to make changes for a simple spelling mistake!

Who cancels or modifies the invoice?

It's up to the company that made the mistake to cancel the original invoice. The customer, on the other hand, can't touch it: the new document created would have no repercussions on the tax authorities.

However, if you notice any problems, you can notify your supplier by means of an invoice cancellation letter, so that the necessary steps can be taken.

How do I modify or cancel an invoice?

What does the law say?

Strictly speaking, you can't cancel an invoice. This is because your customer has already included the original in his accounting.

What's more, since the 2018 VAT anti-fraud law, invoicing software and cash register software must guarantee the inalterability of recorded transactions. In other words, you are not allowed to delete or modify an unpaid invoice created using these tools.

Finally, in the event of an audit by the tax authorities, all your operations must be traceable. Consequently, no "holes" in invoice numbering are allowed: any failure to do so constitutes an offence.

💡 Good to know: keep all your invoices for at least 10 years, even those containing errors.

In these circumstances, what solution is available to you?

The rectifying invoice

To modify or cancel an unpaid invoice, you need to issue a rectifying invoice.

This repeats the original invoice, adding to it if any information is missing, or correcting any errors.

However, there are certain formalities to be observed when drawing up this document:

• The rectifying invoice must have its own numbering, and not repeat that of the document to be cancelled. The law :
  • two invoices cannot have the same number,
  • imposes precise numbering rules: it must be continuous and chronological.
    
    

• The rectifying invoice must explicitly refer to the one to be cancelled. This is why the number and date of the original invoice must be referred to in the body of the document, for example, by including the following statement: "Cancels and replaces invoice no. [number of invoice replaced]".
  
  

• The rectifying invoice must include all the information required on a traditional invoice. These include, in particular, information relating to your company's identity, as well as that of your customer.

Finally, we advise you to contact the customer as soon as possible if you find you have to cancel the invoice:

• This way, you avoid having to pay the invoice in the meantime, which would oblige you to issue a credit invoice;
• you confirm that the first invoice is null and void.

Example of a cancellation invoice

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How can I avoid having to cancel or modify an invoice that has already been issued?

The easiest way to avoid having to issue an amended invoice is simply to limit the risk of errors.

That's why we recommend the use of billing software.

And for good reason, these tools offer a number of advantages:

• They automate the process of issuing invoices (converting quotations into invoices, automatically calculating the amount exclusive of tax, VAT and VAT-inclusive amounts, etc.) and avoid error-prone manual processing and data entry.
  
  

• They provide standard invoice templates: no need to search for the legal information to be included, simply complete the document with your customer's data.
  
  
• They are parameterized to comply with current legislation and regulations. This makes it particularly easy to comply with invoice numbering principles.