How to Issue an Invoice as a Sole Trader: A Complete Beginner's Guide

An invoice is the most fundamental document in any business. Whether you've just received your trade licence or have been running your business for a while, issuing invoices correctly is an absolute must. Invoicing errors can lead to trouble with the tax office, late payments from clients, or even the rejection of expenses. In this guide, we'll walk you through how to issue an invoice correctly, step by step — what to watch out for and what mistakes people most commonly make.

What an invoice is and why you issue one

An invoice is an accounting and tax document that confirms you have delivered goods or provided a service. It serves as the basis for payment, for tax records, and for any potential inspection by the tax office.

When you must issue an invoice

Your obligation to issue an invoice depends on whether you are registered for VAT:

• VAT payers must issue a tax document (invoice) within 15 days of the taxable supply taking place or payment being received — whichever comes first. This obligation is set out in § 28 of the VAT Act.
• Non-VAT payers have no statutory obligation to issue an invoice within a specific timeframe, but it is standard business practice and essential for tax record-keeping. Always issue an invoice whenever you deliver goods or services to another business.

Mandatory invoice requirements

The required information on an invoice differs depending on whether you are a VAT payer or not. Below is an overview of both scenarios.

Invoice for a non-VAT payer

Non-VAT payers are governed by § 435 of the Civil Code, which sets out the mandatory details on commercial documents. An invoice issued by a non-VAT payer must include:

Invoice for a VAT payer (tax document)

VAT payers issue tax documents in accordance with § 29 of the VAT Act. In addition to the details listed above, the invoice must also include:

How to number your invoices correctly

Proper invoice numbering is one of the key requirements. The VAT Act in § 29(1)(b) requires that a tax document carry a reference number that is unique within the numbering sequence used. While the law does not prescribe an exact format for non-VAT payers, the invoice number must still be unambiguous and traceable.

Numbering rules

1. Chronological order — invoices must run in ascending order, with no gaps or skipped numbers.
2. Uniqueness — each number may only be used once.
3. Traceability — the number should make it clear which period the invoice belongs to.
4. Permanence — never delete or overwrite issued invoice numbers.

Recommended numbering formats

Payment terms — what the law says

The payment term is the deadline by which your client must pay the invoiced amount. The Civil Code in § 1963 sets out the basic rules:

Payment term rules

• Between businesses — unless otherwise agreed, payment is due within 30 days of the invoice being delivered, the goods being delivered, or the service being provided — whichever occurs later.
• Longer terms — businesses may agree on payment terms of up to 60 days without restriction. Terms exceeding 60 days are only permissible if explicitly agreed upon and if they are not unfairly disadvantageous to the creditor.
• With public entities — a maximum of 30 days (exceptionally 60 days, if justified by the nature of the obligation).

Common payment terms in practice

Electronic vs. paper invoices

Today, electronic invoicing is increasingly common — and in some cases it is even mandatory.

Electronic invoices

An electronic invoice has the same legal validity as a paper one, provided it meets all statutory requirements. It can take the form of:

• A PDF document sent by email
• An invoice in ISDOC format (the Czech standard for electronic invoices)
• An invoice generated by an invoicing system with a download link

Paper invoices

You can of course continue using paper invoices. However, switching to electronic invoicing is recommended because:

• Cost savings — no printing, envelopes, or postage
• Speed — your client receives the invoice instantly
• Easy archiving — digital copies take up virtually no space
• Searchability — find any invoice in seconds
• Environmental impact — you save paper and reduce your footprint

Invoice archiving

Invoices must be archived for a minimum of 10 years from the end of the tax period in which the supply took place (under § 35 of the VAT Act, for VAT payers). For non-VAT payers, the general retention period for accounting documents is also 10 years (Accounting Act), or at least until the end of the income tax assessment period (typically 3 years, but this can be extended).

Service invoices vs. goods invoices

While the basic requirements are the same, there are some differences in what you include on an invoice for services versus one for goods.

Service invoices

Example of a service description on an invoice:

Logo design and brand identity for the company in accordance with Contract No. 2026-015 dated 5 January 2026. Includes: 3 logo variations, brand guidelines, business cards.

Goods invoices

Example of a goods description on an invoice:

ErgoPlus 500 office chair, cat. no. EP-500BK, black — 2 pcs × 8,500 CZK = 17,000 CZK

The most common invoicing mistakes

Even experienced business owners sometimes make mistakes on invoices. Here are the most frequent errors — and how to avoid them.

1. Missing or incorrect IČO/DIČ

This is one of the most common mistakes. Always verify your client's IČO and DIČ in the Administrative Register of Economic Entities (ARES) on the Ministry of Finance website.

2. Incorrect or missing DUZP

For VAT payers, the date of taxable supply (DUZP) is a mandatory field. Don't confuse it with the invoice date — it is the date on which the goods were delivered or the service was provided.

3. Gaps in the numbering sequence

Skipped or duplicate invoice numbers are a red flag during a tax audit. Keep your numbering sequence meticulous.

4. Incorrect VAT calculation

Rounding errors or an incorrectly applied VAT rate can cause problems. Always check that the tax base + VAT = total amount.

5. Missing registration information

Under § 435 of the Civil Code, OSVČ must include details of their registration in the Trade Licence Register on all commercial documents.

6. Vague description of the supply

A description like "services as per contract" is not sufficient. Always specify exactly what you delivered or carried out.

7. Missing payment details

An invoice without a bank account number and variable symbol creates unnecessary complications when your client tries to pay.

Credit notes (corrective tax documents)

If you discover an error after issuing an invoice, or if goods are returned, a complaint is raised, or a discount is applied, you need to issue a corrective tax document (credit note).

When to issue a credit note

• The client returns goods
• A discount is granted after the original invoice was issued
• The price or quantity was entered incorrectly
• An order is cancelled after the invoice was issued

What a credit note must contain

A credit note must include the same details as a regular invoice, plus:

• A reference to the original invoice number
• The reason for the correction
• The difference between the original and corrected amounts
• For VAT payers: the corrected tax base and VAT amount

Deposits and proforma invoices

In practice, you'll often encounter deposits — particularly for larger projects. Proforma invoices have their own specific rules.

How to handle deposits correctly

1. Issue a proforma invoice — this is not a tax document in itself; it is simply a request for payment.
2. Once the deposit is received — a VAT payer must issue a tax document for the received payment within 15 days of receiving the deposit.
3. After delivering the goods or service — issue the final invoice (settlement invoice), deducting the deposit already paid from the total price.

Invoicing abroad

If you provide services or deliver goods internationally, special rules apply.

Invoicing within the EU

• Services to businesses in the EU — for VAT payers, the reverse charge mechanism applies. The invoice should state: "Tax to be paid by the customer," along with the client's DIČ. The invoice is issued without VAT.
• Goods to EU VAT payers — the supply of goods to another EU member state is VAT-exempt with the right to deduct input tax (you must be able to prove the goods were transported).
• Non-VAT payers invoice to EU clients at the price excluding VAT. Be aware of the threshold for mandatory VAT registration.

Invoicing outside the EU

• Invoices are typically issued in a foreign currency (EUR, USD)
• Services to third countries are VAT-exempt for VAT payers
• Include the Czech National Bank exchange rate on the date of the DUZP for converting the amount to CZK (for tax record purposes)

A practical invoice template

Below is the structure of a sample invoice for an OSVČ who is not a VAT payer:

How DokladBot makes invoicing easier

Issuing invoices doesn't have to be a lengthy process full of uncertainty about whether you've missed something. DokladBot creates invoices for you automatically — just send a WhatsApp message saying who you're invoicing, what for, and how much.

Summary

A correctly issued invoice protects both you and your client. Make sure it includes all mandatory details required by the Civil Code (§ 435) and, for VAT payers, the VAT Act (§ 29). Pay close attention to numbering, the correct DUZP, and a precise description of the goods or services supplied. Electronic invoicing will save you both time and money. And if you want to be sure your invoices are always correct, leave it to DokladBot.

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The information in this article is based on legislation in force as of February 2026, in particular Act No. 89/2012 Coll. (Civil Code), Act No. 235/2004 Coll. (VAT Act), and information published on the Czech Financial Administration portal and BusinessInfo.cz.