In Italy, electronic invoice accounting involves specific requirements on how and when to record issued and received invoices as well as guidelines for managing and storing value-added tax (VAT) records. In this article, we explore how to record an electronic invoice in accounting, while also highlighting the accounting features of the simplified regime and the flat-rate regime.

What’s in this article?

• Recording electronic invoices in accounting
  
• Simplified accounting of electronic invoices: Simplified regime
  
• Simplified accounting of electronic invoices: Flat-rate regime
  

Recording electronic invoices in accounting

To correctly record electronic invoices in accounting for VAT-registered businesses, it’s important to understand the applicable rules and deadlines as well as the distinction between issued and received invoices. A thorough understanding of these procedures ensures tax compliance and the transparency and accuracy of accounting transactions, leading to more effective financial management.

VAT holders must maintain and complete:

• Sales registers (for invoices issued)
  
• Purchase registers (for invoices received)
  
• Receipts registers
  

These registers represent the three mandatory VAT records. The primary purpose of VAT registers is to track the business’s incoming and outgoing transactions to ensure compliance with VAT obligations and requirements.

These registers are mandatory for businesses and freelancers who conduct taxable transactions and are, therefore, VAT taxpayers. However, tax authorities exclude those participating in the flat-rate regime.

Sales registers

Companies must record issued invoices (both immediate and deferred) by the 15th day of the month following the month in which the transaction took place. VAT holders with quarterly registration can record their transactions by the end of the month following the relevant quarter. For example, for a transaction that took place in May, VAT holders can complete the registration by the end of July.

Complying with these timelines is important for two reasons: first, VAT registers ensure the accurate settlement of taxes, and second, they are important for calculating deductions on a monthly or quarterly basis.

Article 23 of Presidential Decree No. 633/1972 governs the register of invoices issued (or the sales register), which includes a comprehensive list of invoices issued (in chronological order) for sales. To properly record electronic invoices in the accounts, each invoice issued must contain the following information:

• Unique sequential number
  
• Date of issue
  
• Customer details
  
• Taxable amount of the transaction
  
• VAT divided by rate or exemption rule
  

Purchase registers

As part of recording electronic invoices in the accounting records, companies must record passive invoices and customs bills in the register of purchases, as governed by Article 25 of Presidential Decree No. 633/1972. One of the main purposes of maintaining the purchase register is to allow the taxpayer to accurately determine the VAT deduction owed.

The registration of passive invoices and customs bills can occur either before the periodic VAT settlement or, alternatively, before the annual VAT return. In this way, the received invoice can be deductible in the VAT settlement month in which the company records it and will always be within the deadline for submitting the annual return for the year in which the customer receives the invoice, referencing that same year.

The rule requires businesses to provide the following data for each purchase invoice recorded:

• Date of the invoice or customs bill
  
• Trade name of the business
  
• Full name of the transferor or supplier if not an enterprise, company, or entity
  
• The taxable amount and the amount of tax, separated according to the rate applied
  

For invoices related to VAT-exempt transactions, state the reason for VAT exemption and, if applicable, state the regulatory reference instead of the tax.

Receipts registers

Maintaining the register of receipts for electronic invoice accounting—specified in Article 22 of the Presidential Decree—is for retail traders and other individuals who are not required to issue an invoice unless requested by the customer. The recording of receipts serves as an alternative to maintaining an invoice register, although the objectives are essentially the same.

While the introduction of the electronic receipt—which requires the electronic storage and transmission of daily receipt data—has largely eliminated the obligation to maintain a register of receipts, it’s still a good idea to record daily receipts in a dedicated register, whether electronic or paper. This is useful for accurately determining credit and debit VAT as well as in the event of any failure of the electronic cash register.

Keeping and storing VAT registers

You can also maintain VAT registers electronically, thanks to the functionality of electronic invoicing software, which allows users to import data on issued and received invoices automatically. For records kept electronically, starting in 2022, it is no longer mandatory to print them, although the tax authorities can require them for review in the event of an audit.

It is important to know what electronic storage of VAT records involves. It is not just about archiving on digital devices, but rather a specific process that must adhere to the rules set out in the Digital Administration Code (CAD) and the Ministry of Economy and Finance (MEF) decree of June 17, 2014, ensuring the requirements of immutability, integrity, authenticity, and legibility.

The preservation process concludes with the application of a time stamp—enforceable against third parties—on the archived file and within three months of the tax return filing deadline.

Even after the introduction of electronic invoicing, you can still use paper registers in analog format, with pages consecutively numbered. However, you must keep paper VAT registers for a minimum period of 10 years from the date of the last entry or until the completion of any tax assessment activities you might have initiated already.

Simplified accounting of electronic invoices: Simplified regime

One of the key features of this tax regime is the use of the cash basis instead of the accrual basis. Under the cash basis, companies only record paid transactions. As a result, anything that has been issued but not collected (e.g., because the payment terms have not yet passed) does not have to be recorded. Therefore, only the business’s actual liquidity determines its income.

Accounting benefits of the simplified regime

Under the simplified regime, accounting requirements are less strict. In fact, it’s not necessary to prepare final annual financial statements or complete all the accounting records typically required by standard accounting practices. For example, accounting regulations require neither a journal book nor an inventory book.

The mandatory registers are:

• Single employment register (if the company has employees)
  
• VAT register
  
• Register of receipts and payments
  
• Register of assets (or depreciable assets)
  

In addition, VAT holders under the simplified accounting regime who only issue invoices are exempt from the obligation to maintain VAT registers. This includes individuals engaged in activities other than those outlined in Article 22 of Presidential Decree No. 633/1972 (such as retail trade and similar activities) and who use the data provided by the Italian Revenue Agency (Agenzia delle Entrate).

Managing the invoicing process for businesses can become complex, especially as your business grows. Some tools, such as Stripe Invoicing, a comprehensive and scalable platform, can help automate this process. With Invoicing, you can create and send invoices for both one-time and recurring payments without needing to write any code. With Invoicing, you can save time and receive payments more quickly, as Stripe users are able to collect on 87% of issued invoices within 24 hours. Additionally, through collaboration with third-party partners, you can use Invoicing for electronic invoicing as well.

Simplified accounting of electronic invoices: Flat-rate regime

The flat-rate regime offers several benefits for tax purposes and accounting. In fact, in terms of flat-rate e-invoice accounting, any taxpayer who joins this regime is:

• Exempt from VAT: They don’t have to charge VAT on the invoice or deduct the tax paid on purchases, in addition to being exempt from the obligations to settle and pay the tax and submit the relevant annual return.
  
• Exempt from registration: Taxpayers are free from the requirements to record issued invoices, receipts, and purchases.
  
• Able to issue invoices with unlimited amounts: As of January 1, 2025, taxpayers can issue a simplified invoice with no upper limit on the amount. Previously, the limit was €400, which remains unchanged for non-flat-rate taxpayers.
  

As a result, these benefits lead to reduced costs for the accountant, who faces fewer formalities and, therefore, charges lower fees for handling the accounting of electronic invoices under the flat-rate regime.