Gross or Net Invoice: When to Use Which?
You issue net invoices to business customers and gross invoices to private customers. This distinction isn't arbitrary – it follows legal requirements and the way you display your prices.
Net Invoice (B2B)
Business customers receive prices without VAT: "Consulting: €100 plus VAT". These net prices appear on the invoice, with VAT calculated at the end.
Why? Business customers can reclaim VAT as input tax. For them, only the net amount matters – the gross amount is a pass-through item.
Gross Invoice (B2C)
End customers must see prices including VAT: "Consulting: €119". These gross prices appear on the invoice, with the included VAT shown at the end.
Why? Private individuals pay VAT and don't get it back. Legally, you must display end customer prices gross – the invoice follows this pricing.
The Common Mistake: Round Gross Prices with Net Invoice
You want to charge a private customer "€750". So you create a net invoice and try different net amounts until the gross total lands on €750.00.
The problem: The net prices become awkward (€630.25), VAT gets distributed across multiple line items, and the total still doesn't match exactly.
The solution is simple: Create a gross invoice. Then enter "€750" directly as the price – done. The included VAT is automatically shown correctly.
Remember: If you want to achieve a round gross amount, work with gross prices. If you want to achieve a round net amount, work with net prices.
Why VAT Is Calculated at the End
VAT is legally calculated on the total sum, not on individual line items. The reason: rounding errors. Compare the two calculation methods (or use the VAT calculator):
| Line Item | VAT (19%) | Net |
|---|---|---|
| Software Development | €49.08 | €258.30 |
| Consulting | €39.22 | €206.40 |
| Testing | €14.92 | €78.50 |
| Documentation | €15.28 | €80.40 |
| Net Total | €623.60 | |
| VAT 19% | €118.50 | |
| Gross Total | €742.10 |
In GrandTotal
Choose your default mode in the client settings. When creating an invoice, you can switch between gross and net at any time with one click.
VAT is automatically calculated correctly on the total sum.
Rule of Thumb
Business customers receive net invoices, private customers receive gross invoices.
Set the most common case as default and switch when needed.
At a Glance
Net Invoice (B2B)
Prices without VAT, VAT added at the end
Gross Invoice (B2C)
Prices incl. VAT, VAT shown at the end
Legally Required
End customers: gross prices, business customers: net prices
Common Mistake
Trying to achieve round gross prices with net invoice
VAT Calculation
Always on total sum, otherwise rounding errors
In GrandTotal
Switchable with one click, automatically calculated correctly