Invoicing for lawyers, architects and consultants
Invoices with withholding, a 130 that only has to be filed if not enough is withheld from you, suplidos that carry no VAT and clients who pay when it suits them. Cairos has it all set up: you write the item and the rest comes out on its own.
What is particular about invoicing in professional services
A professional has no warehouse and no production. They have hours, withholdings and a cash position that depends on being paid.
Your invoices carry withholding
When you invoice a company or another professional, they withhold 15% of IRPF. The reduced 7% does not last “three years” by rule of thumb: it applies in the tax year you register and in the two following ones, provided you had carried on no professional activity in the year before registering, and you have to tell the client in writing. That money does not reach you: your client pays it over in your name and it appears on your annual return as paid on account.
The 130 depends on how much is withheld from you
If at least 70% of your income in the previous year had withholding applied, you do not have to file form 130. It is an exception only professional activities have: a business owner on estimación directa always files it. And in the first year it is not the previous year that is looked at, but the instalment payment period itself.
Suplidos and provisiones de fondos
The court fees or the professional body's approval fee that you pay on your client's behalf are suplidos: they go on the invoice without VAT and outside the taxable base, provided you pay them in the client's name under their express instruction and can evidence the amount. In exchange, you do not deduct that VAT yourself. Putting them in as your own expense inflates your income and your VAT.
Hours, retainers and assignments
Some clients pay a monthly retainer, others by the hour and others by fixed assignment. Retainers are invoiced on their own each month and assignments come out of the accepted quote.
How it is done today, and how it looks with Cairos
The small firm does not lose money by invoicing little. It loses it by invoicing late.
Without Cairos
- The invoice is done in Word and the withholding is worked out by hand every time.
- Nobody knows whether a 130 is due until the accountant says so.
- Suplidos get entered as income and push the taxable base up for no reason.
- Retainers get invoiced when somebody remembers, and sometimes not at all.
- In October you discover there is an invoice from June that was never paid.
With Cairos
- The withholding is applied on its own according to the client and the year you registered.
- The program says whether you are above or below 70% and whether a 130 is due.
- Suplidos go on their own line, without VAT and without adding to the base.
- Retainers are issued on their own on the day they fall due, with their sequential numbering.
- Due dates give warning before they fall due, and the client sees what is outstanding in their portal.
Your invoice, line by line
A professional's invoice has three things a trader's does not: withholding, suplidos and sometimes exemption. This is how each one looks.
| Item | How it is going | Why |
|---|---|---|
| Fees to a company | 21% VAT and −15% IRPF | The company is obliged to withhold from you and pay it over on its form 111. Only if your activity is in section two or three of the IAE. |
| Fees in the year you register and the two following years | 21% VAT and −7% IRPF | A reduced rate for anyone starting a professional activity who did not carry it on in the previous year; you have to tell the client. |
| Fees to a private individual | 21% VAT, no withholding | A private individual does not withhold: that is why working for private individuals forces you into the 130. |
| Fees and suplidos paid on the client's behalf | No VAT and outside the taxable base | Art. 78.Tres.3º: paid in their name under express instruction, with a receipt, and without you deducting that VAT. |
| Advance on account | With VAT if it is on account of fees | It is an advance payment and VAT becomes chargeable when it is received; if it is to pay suplidos, it does not. |
| Services to a company in another EU country | Without Spanish VAT | The place of supply is where the customer is: you have to be on the ROI, put the reverse charge reference on the invoice and declare it on the 349. |
Cairos leaves the withholding set per client, so there is no remembering it on each invoice, and it warns you when you invoice outside Spain that this drags in a 349 and probably an 036. Careful about taking withholding for granted: only the income of professional activities carries it, that is, the activities in sections two and three of the IAE tariffs. A registration in section one is a business activity and nothing is withheld.
The modelos you end up filing
| Form | When | Why in your case |
|---|---|---|
| 303 | Quarterly | Your output VAT less the input VAT on expenses and utilities. |
| 130 | Quarterly | Only if less than 70% of your income carries a withholding. Cairos checks it. |
| 349 | Quarterly or monthly | If you supply services to EU companies. It is monthly by default: it only goes quarterly if you do not exceed €50,000 in the quarter or in the four preceding ones. |
| 347 | February | Customers and suppliers above €3,005.06 a year, excluding the transactions that already go on the 190 because they carry withholding. |
| 111 | Quarterly | If you withhold from another professional who subcontracts work to you. |
What you will actually use
Just enough to invoice properly and be paid on time, without warehouse screens you are never going to open.
Invoices with withholding
The 15% or the 7% set per client, and the net to be received worked out.
Monthly retainers
The month's invoice is generated on its own on the day it falls due, with its numbering. Sending it to the client is still your decision.
Form 130
With the gastos de difícil justificación and depreciation, which almost nobody applies correctly.
Payments received and the customer portal
Your client comes in through a private link and sees their invoices and what they owe. As for paying, they pay through their bank: there is no payment gateway.
Try it with your firm's invoices
Free plan with up to 30 documents a year, no card needed. And if it does not work for you, your data leaves with you.
Questions about professional services
Your firm invoices differently. So does the program.
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