A Comprehensive Guide to Managing Supplier Compliance Under the Invoice System! Explained Clearly with a Checklist

Key Points for Buyers and Sellers Regarding the Invoice System

The invoice system impacts both buyers and sellers in a transaction. Because the required actions differ for each, it is essential to take steps aligned with your specific objectives.

Key Points for Supplier Management as a Buyer

□ For ongoing business partners (suppliers, etc.), perform the following individually:
　① Confirm whether they are registered as an invoice issuer.
　② Share understanding regarding invoice formats and receipt methods.

□ Perform system upgrades for accounting and procurement systems as necessary.

□ Conduct employee training regarding the invoice system.

Key Points for Seller Compliance

□ Evaluate whether your customers require invoices.

□ Compare and evaluate the implications of registering versus not registering.

Key Points for Those Registering

□ For ongoing business partners (customers, etc.): 　① Share your registration number, and ② align on invoice formats and delivery methods.

□ Review current documents to determine how to update them to meet invoice requirements.

□ Evaluate methods for delivering invoices (e.g., providing electronic invoices).

□ Perform system upgrades for POS, accounting, and order management systems as necessary.

Buyer Preparation: Preliminary Confirmation with Suppliers

First, evaluate whether your company will apply the simplified tax system.
If applying the simplified tax system, storing invoices is not required for purchase tax credits, so the following items do not need to be considered.

Point 1: Evaluate Whether Your Purchases and Expenses Require Invoices

In principle, storing invoices is a requirement for purchase tax credits, even for one-time transactions or small-amount purchases.

There are exceptions where invoice storage is not required, such as public transportation costs under 30,000 yen, daily allowances paid to employees, business travel expenses, and commuting allowances.

Point 2: For Ongoing Transactions, Verify That Invoices Received from Suppliers Meet Requirements and Consult with Them as Necessary

Confirm in advance whether your suppliers will register as invoice issuers.

It is important to reach a consensus with suppliers regarding what constitutes a valid invoice.

Discuss price adjustments as necessary. You may also receive requests for price adjustments from your suppliers.

Point 3: Determine How to Store and Manage Received Invoices

It is important to be able to manage invoices by distinguishing whether they contain a registration number.

To apply the transitional measures (80% or 50% deduction) for taxable purchases from non-qualified invoice issuers, you must store itemized invoices.

Also, consider the scanner and smartphone storage options under the Electronic Book Preservation Act.

Point 4: Determine Methods for Recording in Books and Calculating Purchase Tax Credits

The requirements for recording in books remain unchanged after the start of the invoice system.

If applying exceptions where invoice storage is not required or utilizing transitional measures for purchases from non-qualified issuers, you must record that fact.

There are two methods for calculating purchase tax credits: the cumulative calculation method and the gross calculation method.
(If sales tax is calculated using the cumulative method, purchase tax must also be calculated using the cumulative method.)

uSonar Enables Bulk Assignment of Registration Numbers for Business Partners and Suppliers

uSonar maintains a proprietary corporate database called "LBC." LBC covers business locations nationwide, including individual branches, stores, and factories.

Since it also holds invoice numbers, our customer data integration solution "uSonar," which is powered by LBC, allows for the bulk assignment of registration numbers to your internal data.
Please feel free to contact us.

Summary

In this article, we explained the important aspects of supplier management under the invoice system.
Proceed with your preparations after understanding the key points for both buyers and sellers, as well as the procedures for preliminary confirmation with suppliers as a buyer.

uSonar provides a Customer Data Integration Solution centered on our LBC corporate database.
By leveraging LBC, we can support you in assigning invoice registration numbers. Please check the following for detailed materials.

Invoice Number Assignment Available
Data Enrichment via One of Japan's Largest Corporate Databases