In the process of issuing electronic invoices, errors in product names are common errors that many business accountants encounter. Improper handling can lead to serious consequences such as being fined by tax authorities, affecting reputation and business operations. The following article will provide detailed instructions on how to write invoices to correct incorrect product names according to the latest regulations, helping businesses both ensure legality and save processing time.
1. Incorrect product name invoice and the need to handle it
Invoice with wrong name of goods is a common mistake in the process. invoice, often caused by incorrect item codes, inaccurate description of the transaction, or incorrect contract information. Although this error may seem small, it poses many risks to the business if not handled properly and promptly.
Misspelled product names can affect:
- Validity of invoice: According to regulations, invoices with information that is not true to the actual transaction may be considered invalid, not deductible for VAT or not included in reasonable expenses when settling taxes.
- Accounting process: Wrong product name leads to wrong accounting account, distorting financial reports.
- Risks during tax audit: Tax authorities may inquire, impose penalties or impose taxes if they detect Incorrect invoice which has not been properly adjusted.
Therefore, when errors are detected, accountants need to quickly apply them. How to write an invoice to correct incorrect product names in accordance with legal procedures. Adjustments must comply with the instructions at Circular 78/2021/TT-BTC and related documents, and fully archive accompanying records such as the minutes of agreement between the two parties.
Timely and proper handling not only helps businesses avoid legal risks but also ensures the transparency and accuracy of the accounting system - a vital factor in financial management and internal control.
2. Legal basis for handling invoices with incorrect product names
Incorrectly naming goods on invoices, whether paper or Electronic invoice, must be processed in accordance with regulations to ensure legality and avoid risks when declaring taxes. Current regulations mainly focus on electronic invoices and are specifically guided in the following documents:
- Decree 123/2020/ND-CP (issued on October 19, 2020): Invoice regulations, documents, of which Article 19 provides specific guidance how to process invoice there is an error.
- Circular 78/2021/TT-BTC (issued on September 17, 2021): Detailed guidance on the implementation of a number of articles of the Law on Tax Administration related to electronic invoices. Article 7 of this Circular clearly stipulates the case of adjusting invoices with incorrect product names.
According to the above legal documents, when detecting incorrect product names on electronic invoices (or paper invoices), businesses need to create an adjustment invoice to update the correct information. This is How to write an invoice to correct incorrect product names recognized by law, helping businesses ensure compliance with regulations and facilitate accounting, auditing and tax reporting.
Correct application of legal bases not only helps businesses avoid administrative penalties but also demonstrates professionalism and transparency in financial and accounting activities.
3. Reasons for incorrect product name on invoice
Incorrect product names on electronic invoices are common errors in the process of preparing accounting documents, especially in businesses with many product lines or frequently changing product categories. Below are some common causes of this error - an important basis for businesses to correctly identify How to write an invoice to correct incorrect product names after:
- Error in billing process: Accounting staff can get confused between item codes, descriptions or product names, especially when invoice volumes are large or the timing of invoicing is rushed.
- Receiving incorrect information from sales or customers: If the input information is incorrect from the beginning, the accountant will not have an accurate basis for recording the correct goods name on the bill.
- Failure to update product information in a timely manner: Product names change according to season, promotion programs or new sales policies but are not fully updated on the invoice software.
- Electronic invoice software error: Some software can automatically suggest or remember old information, leading to incorrect product names if the user does not check carefully.
- Intentionally misrepresenting to legitimize violations: In some cases, intentionally mislabeling goods to adjust tax rates or avoid tax collection is a serious violation of the law.
Regardless of whether the cause is subjective or objective, businesses should prioritize early detection and handling. Invoice adjustments need to be made. before the tax authority decides to inspect or examine to avoid the risk of being fined or having unnecessary tax collection.
4. Consequences when electronic invoices with incorrect product names are not processed promptly
When detecting errors but delaying in adjusting electronic invoices, especially incorrect product names, businesses not only violate legal regulations but also face a series of legal, financial and reputational risks. Below are serious consequences if not promptly and correctly applied. How to write an invoice to correct incorrect product names as prescribed:
- Non-compliance with the law: According to Circular 78/2021/TT-BTC and Decree 123/2020/ND-CP, errors on invoices must be handled promptly. Failure to make timely adjustments may be considered an administrative violation in the field of tax and invoices.
- Invoice may be considered invalid: If the name of the goods does not match the actual transaction content, the tax authority may refuse to accept the invoice, directly affecting the business's interests.
- VAT not deductible: Invoices with incorrect product names may not be eligible for input tax deduction, increasing actual costs for the business.
- Not included in reasonable expenses when settling taxes: Costs arising from incorrect invoices will not be included in reasonable expenses, leading to increased corporate income tax payable.
- Risk of administrative fine up to 15 million VND: According to Article 24 of Decree 125/2020/ND-CP, the fine can be up to 15 million VND depending on the level and nature of the violation.
- Being subject to a surprise inspection or audit by the tax authorities: Errors that are not handled transparently and promptly can lead to doubts about the legitimacy of transactions, leading to more extensive checks.
- Causes difficulties in auditing and reduces legal reputation: Incorrectly named invoices will negatively affect legal documents and create negative points in the eyes of auditors or investors.
- Increased operating costs: Including invoice amendment costs, legal consulting fees, administrative fines and time to redo procedures with partners.
- Loss of trust from partners and customers: Partners may refuse to accept incorrect invoices, affecting payment progress or contracts. Repeated errors will reduce the business's reputation in the market.
5. Two ways to handle electronic invoices with incorrect product names according to regulations
When discovering that the electronic invoice sent to the buyer has the wrong product name, the business needs to handle it properly to ensure compliance with the law and avoid tax risks. According to Article 19 of Decree 123/2020/ND-CP and Clause 1, Article 7 of Circular 78/2021/TT-BTC, there are two common handling options: set up replacement bill and set up Adjustment invoice.
5.1. Create a new replacement invoice
Suitable when serious errors make the invoice unusable, the old invoice needs to be completely destroyed and a new one issued.
How to do:
- Create a new electronic invoice to replace the incorrect invoice.
- Clearly state on the invoice the following: “Replacement for invoice Form No… symbol… number… date… month… year…”.
- It is recommended to have a written agreement with the buyer noting the error before issuing a replacement invoice.
- Sign the new invoice.
- Send replacement invoice to tax authority for code issuance (if using invoice with code).
- Send new invoice to buyer.
- Store old invoices and replacement invoices according to regulations.
- In case the replacement invoice is still incorrect, must continue to issue new replacement invoices. No adjustment or cancellation invoices are allowed.
5.2. Create adjustment invoice
Applicable when the invoice has minor errors that do not affect the total payment value (such as incorrect product name, buyer's tax code, etc.).
How to write an invoice to correct incorrect product names:
- Create an adjustment invoice, with the following text: “Adjustment for invoice Form No… symbol… number… date… month… year…”.
- State clearly what is wrong and what is right.
For example: “Adjust the product name from 'Women's shirts' to 'Men's shirts' of invoice number... symbol... date... month... year..." - If you are only adjusting content that is not related to money, you may not need to fill in the value columns (or cross them out).
- You can use the “Notes/Explanations” feature to record the adjustment content. However, because there are no clear regulations from the tax authorities, you should consult before applying.
- Sign and send to tax authority for code issuance (if using invoice with code).
- Send adjusted invoice to buyer.
- Archive erroneous invoices along with adjustments.
- If the adjusted invoice is still incorrect, must continue to issue new adjustment invoices, not to be replaced or cancel invoice pre-adjust
6. Time to process invoices with incorrect product names
Current law does not provide specific regulations on the time when electronic invoices with incorrect product names must be processed. However, businesses need to proactively make early adjustments to limit tax risks and avoid unnecessary sanctions.
According to the provisions of Article 7, Decree 123/2020/ND-CP and instructions from Circular 78/2021/TT-BTC, when detecting errors in electronic invoices such as incorrect product names, enterprises need to make a notice to the tax authority (according to Form No. 04/SS-HDDT) and make adjustments to the information on the invoice.
Some important notes about error handling timing:
- Adjustment notices can be sent at any time., as soon as the error is discovered, but No later than the last day of the VAT declaration period in which invoices need to be adjusted.
- In case the enterprise does not submit Form 04/SS-HĐĐT on time will be considered an administrative violation and may be subject to penalties according to Decree 125/2020/ND-CP, with a fine of VND 2 million or more depending on the level and consequences of the error.
- Early processing not only ensures the accuracy of tax reports but also helps businesses maintain their reputation with customers and tax authorities.
Therefore, How to write an invoice to correct incorrect product names not only correct in content but also correct in meaning time of execution, to comply with regulations and optimize the accounting and tax efficiency of the enterprise.
7. In case the invoice has a code that has not been sent to the buyer
During the process of creating electronic invoices, many businesses encounter situations where they have successfully issued a code but discover the wrong product name before sending it to the buyer. This is a relatively simple case to handle if the accountant understands the process in accordance with the law. Below is How to write an invoice to correct incorrect product names in this case:
- Report errors to tax authorities: Because the invoice has been coded but not yet sent to the buyer, the seller needs to create Form No. 04/SS-HDDT to report errors and request invoice cancellation.
- Create new replacement invoice: After sending the notification, the accountant will create a new electronic invoice with the correct adjusted product information. This invoice must be digitally signed and sent back to the tax authority for a new code.
- Send new invoice to buyer: After being assigned the code, the seller sends the adjusted electronic invoice to the buyer instead of the old, erroneous invoice.
- Archive new invoice: New invoices must be stored properly to ensure legality and serve future inspections.
- Tax authorities process cancellation of old invoices: Incorrect invoices will be confirmed by the tax authority to be canceled on the electronic invoice management system and will no longer be legally valid.
Correctly implementing the above steps helps businesses avoid violating regulations and ensure accurate tax declaration. This is also one of the typical cases in How to write an invoice to correct incorrect product names that accountants need to master to handle promptly and correctly.
8. The role of electronic invoice software
In the process of issuing invoices, errors in product names are a common situation that can affect the legality of documents, leading to tax and accounting risks. Therefore, the use of electronic invoice software become an essential tool to help businesses minimize risks, increase accuracy and comply with legal regulations when needing to adjust invoice information.
- Detect errors before issuing invoices: Modern software is integrated with an automatic checking system, which helps detect formatting errors, duplication or missing information – including incorrect product names – before the invoice is officially issued.
- Support for correct invoice creation: When detecting incorrect product names after the invoice has been issued, the software will guide the accountant to create Form No. 04/SS-HĐĐT or a new adjustment invoice according to the tax authority's procedures, ensuring validity and legality.
- Built-in notification templates and connection to tax authorities: Many software provide necessary document templates (such as Form 04) and support timely submission to the General Department of Taxation, helping accountants save time and avoid manual errors.
- Scientific invoice storage and management: Instead of searching manually, businesses can easily search for invoices that need to be adjusted according to many criteria such as tax code, date of creation, invoice number, etc., ensuring quick error handling when needed.
Bizzi's B-invoice Electronic Invoice Solution
Software Bizzi's B-invoice Providing comprehensive solutions for businesses in managing and handling erroneous invoices:
- Create invoices in standard XML/PDF format;
- Use custom invoice templates and generate invoices in bulk;
- Connect directly to the tax authority system to authenticate invoices using authentication codes;
- Store invoices for at least 10 years and support fast downloading and printing (PDF, XML), integrating digital signatures;
- Allow Bill lookup easy and manageable by status (released, adjusted, canceled…);
- Seamless integration with internal accounting software and ERP systems.
Although Bizzi does not describe in detail how to handle this specifically, Invoice correction of incorrect product name, the existing features show that B-invoice fully meets the prescribed business steps and is a reliable solution for businesses that want to minimize errors and optimally comply with the electronic invoice process.
9. Summary
Understanding how to write an invoice to correct incorrect item names is a accounting important, must be done properly and promptly to avoid legal risks. Depending on whether the invoice has been sent to the buyer or not, the enterprise can choose to cancel and issue a new invoice, or issue an adjustment/replacement invoice. When applying the adjustment or replacement method, the accountant must comply with the principle of clearly stating the information on the new invoice, such as "Adjustment for invoice number..." or "Replacement for invoice number...", and at the same time follow the correct procedures as prescribed in Decree 123 and Circular 78.
In cases where the error only relates to the name of the goods and does not affect the payment value, the issuance of an adjustment invoice is often prioritized, with the adjustment content clearly shown on the invoice. To minimize risks and ensure accuracy, businesses should use electronic invoice software - a solution that helps control, update and handle errors quickly, in compliance with current regulations.
To improve the efficiency of invoice management as well as automate the financial and accounting processes of the business. Register to experience Bizzi's comprehensive solution suite today!
- Link to register for a trial of Bizzi products: https://bizzi.vn/dang-ky-dung-thu/
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