Gastronomy: How to avoid mistakes in interim invoices

Interim invoices are part of everyday life in the hotel industry and gastronomy – but from a financial administration perspective, they harbour considerable risks. Restaurateurs who pass on interim invoices to their guests without clear allocation or without a transaction number risk tax consequences and legal trouble.
What do restaurateurs need to bear in mind to play it safe during tax audits?

Receipt issuance obligation – the legal basis

Since 1 January 2020, Section 146a of the Abgabenordnung (AO) (German Fiscal Code) requires all companies with electronic recording systems to issue receipts for every business transaction – this will remain in force until the new government initiates a change in the law.

As of today, this means that every customer must receive a receipt upon payment, regardless of whether it is issued in paper or digital form.

Important facts about the obligation to issue receipts:

• The issuance of receipts is mandatory, but it is voluntary for customers to take them.
• Businesses with open cash registers (without an electronic system) are not required to issue receipts automatically. However, a handwritten receipt must be issued at the customer’s request.
• The receipt must contain certain mandatory information. This includes, in particular, the sequential transaction number, date, time, amount, tax rate, payment method and name of the company.

These legal regulations serve to prevent manipulation and ensure the complete traceability of all transactions – a key objective of the tax authorities.

Interim invoices: Practically necessary, but dangerous

In the restaurant industry, interim invoices are part of everyday life. Whether to provide an overview of the current table order, for larger groups or for split bills, these preliminary bills are often created before the final receipt.

What is an interim invoice?

An interim invoice is a provisional, non-tax-relevant receipt that provides an overview of the current status of a table’s bill. It is primarily used for internal communication between service staff and the kitchen – or as a guide for guests when splitting the bill.

Problems arise when:

• Interim invoices are mistakenly regarded as official receipts.
• Interim invoices are issued to customers without being marked as provisional receipts.
• Interim invoices are not clearly linked to the final invoice.

During a company audit, this can quickly lead to a lack of transparency and involve considerable effort on the part of the restaurateur to trace the transaction chain.

The importance of the transaction number

A key element of the receipt issuance requirement is the sequential transaction number. It ensures that every transaction can be traced – from the first booking step to the payment.

Why are transaction numbers so important?

• They allow every single transaction to be tracked seamlessly.
• They create a link between the interim invoice and the final invoice.
• They serve as evidence in external tax audits.

Important to know: If interim invoices have to be issued to guests for operational reasons, they should always contain a transaction number that allows them to be linked to the final invoice at a later date. This is the only way to prove to auditors beyond doubt that the transactions have been recorded correctly.

Interim invoices: What exactly does the tax office check?

Our experience shows that during a tax audit in the catering industry, the focus is often on cash management. Interim invoices and undocumented business transactions are a frequent point of contention. What are the auditors interested in?

• Are all business transactions recorded completely and promptly?
• Are there receipts that were issued to customers without being assigned to an entry?
• Have interim invoices been created that can no longer be found in the system?
• Are transaction numbers missing or inconsistent?

It is not uncommon for tax auditors to receive anonymous audit reports. As a result, they then carry out an actual comparison between the interim receipt and the final receipt during a tax audit.

Negative consequences of violations

If it can no longer be reconstructed that the interim document (in the form of the final document) was actually taken into account in the accounting, this can lead to a formal error and, as a result, also justify an additional assessment.

Possible consequences:

• Additional tax assessments by the tax office (often based on experience or comparable businesses)
• Tax back payments
• Fines for formal violations

These consequences can not only be expensive, but also jeopardise the reputation and continued existence of a restaurant business.

Specific recommendations for action regarding interim invoices

To be on the safe side legally, restaurants should take proactive measures and review their processes for issuing interim invoices and receipts.

Our recommendations:

• Clearly label interim invoices: e.g. with ‘Advance receipt – not for payment’
• Only give guests final invoices – with all mandatory information
• Never use interim receipts as proof of payment
• Ensure connection to the final invoice: linked transaction number or unique table ID
• Check the POS system for completeness: is every transaction traceable?
• Archive regular cash reports – including electronically
• Employee training: everyone in the team must know which receipts they are authorised to issue
• Consult your tax advisor and/or cash register provider if anything is unclear

A reliable, GoBD-compliant cash register system with documentation function and automatic numbering is an important key to legal certainty.

Be careful with interim invoices – it’s better to be safe than sorry

Interim invoices are an integral part of everyday life in the catering industry. To be on the safe side legally, catering businesses should take proactive measures and review their processes relating to interim invoices and issuing receipts. It is important to bear the following points in mind:

• Do not treat interim invoices as final receipts and do not issue them to customers
• Use and document transaction numbers
• Check your POS system regularly
• Issue and archive final receipts properly.

Then you should be on the safe side when it comes to upcoming audits.