European concept of "invoice" has a different meaning in Russia

There is one interesting difference in understanding of the meaning of "invoice" in Europe and Russia. Those companies who are coming to Russia to implement Microsoft Dynamics NAV or AX, usually face a mismatch in understanding of this concept. Awara IT Solution specialist discuss this practically in every meeting of NAV or AX implementation in Russia, especially in the project of roll-outs from abroad, thus this would be very good to blog about it here.

In Europe (or other parts of the world) the term "invoice" is treated as accounting concept. Invoice is an official legal accounting document. The company who issues invoice books revenue, and the company who receives invoice books costs. The accepted invoice means the seller has duly provided the service or transferred the ownership rights to the buyer.

In Russia the word "invoice" is translated as Счёт [Schiot]. This is a paper printform that basically describes the payment details that buyer needs to use when making a payment. It has no legal value (unless in some cases seller treats it as an official offer). It is mainly used for making the prepayments or supporting the payment process. E.g., if I want to buy cheapest laptop in Russia, I ask 5 computer shops to send me (Russian) "invoices"; I select the cheapest one and pay it, and I trash the others four.

For Russia, the legal document that would mean transferring the ownership rights for the items from seller to buyer would be a document called "Way-Bill" [Nakladnaya], official name is TORG-12. When services are duly provided, there is a different document called "Act of acceptance of services". Only those documents are treated in Russia in the same manner as the invoice in Europe.

The other document that is used in Russia is a VAT invoice. It is basically another printform that follows either Way-Bill or Act of acceptance and simply shows how much VAT there is in the transaction. It is needed to correctly book and deduct VAT amount (regardless the fact that VAT amounts are also shown in Way-Bill or Act :-) ). So usually you will face two documents for one transaction: Way-Bill and VAT invoice or Act of acceptance and VAT invoice; and, there might be also "invoice" with payment details, which is treated as a sort of payment advice.

Note here that Way-Bill and VAT invoice are those forms that strictly defined in terms of the layout - those docs should contain minimally defined fields of a certain layout, otherwise you customer will have risk of not deducting VAT or cost. You can add any additional fields if you need, it is not prohibited. The form of the Act and the Invoice is not generally limited by certain layout, however there are some commonly used typical standards.

Way-Bill sample:

Sample of VAT invoice:

Also, numbering of VAT invoices and Way-Bills should be consequent, one by one. It is possible to use both letters and numbers in the numbering, however the practice is to use only numbers but not letters (some accountants might say it is prohibited to use letters in the numbers of those documents).

Russian localized version of NAV and AX has needed default printforms for the documents, described above.