Self-Billing Invoice: What It Is and When to Use It

An invoice the customer raises on the supplier’s behalf, by agreement.

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self billed invoice agreementself-billing arrangementbuyer created invoicerecipient created tax invoice

What Is a Self-Billing Invoice?

Under a self-billing arrangement the customer prepares the invoice for the supplier’s goods or services, in the supplier’s name, and both parties treat it as the supplier’s invoice. It is sometimes called a buyer-created or recipient-created invoice.

It exists because in some relationships the buyer holds the authoritative data. A platform knows exactly what each contributor earned; a manufacturer knows exactly what quantity of raw material was consumed. Letting the buyer generate the invoice removes a reconciliation step.

Self-billing always rests on a prior written agreement between the parties, and the conditions under which it is permitted are set by tax rules that differ by country. It is not something either side can adopt unilaterally.

When to Use It

A platform or marketplace settles with many small suppliers from its own data.
A buyer holds the definitive record of quantity consumed or work performed.
Both parties have signed a self-billing agreement and your rules permit it.
Large supplier networks need consistent invoice formatting and numbering.

Who Uses It

Marketplaces and platforms paying contributors or sellers
Manufacturers settling with component and material suppliers
Large retailers operating supplier self-billing programmes
Agencies settling with pools of freelance contributors

Benefits of a Self-Billing Invoice

Removes mismatches between what the buyer recorded and what the supplier billed.
Standardises invoice format and numbering across a whole supplier network.
Reduces admin for small suppliers who would otherwise invoice manually.
Speeds settlement, because there is no invoice to wait for.

Fields to Include on a Self-Billing Invoice

The fields below are the ones businesses commonly include. They are a practical starting point, not a statement of what any particular country requires.

A clear indication that the invoice is self-billed
The supplier’s name, address, and tax registration number
The customer’s name, address, and tax registration number
A unique invoice number from the agreed self-billing series
Issue date and the supply period covered
Description, quantity, and unit price for each line
Net amount, tax rate, and tax amount
Total due, currency, and payment reference
Reference to the self-billing agreement between the parties

Requirements differ by country

What must appear on a self-billing invoice, when it has to be issued, and how the tax is treated are set by national rules — and those rules change. This page is general educational information, not tax or legal advice. Check the current guidance published by your own tax authority, or ask a qualified advisor, before relying on any format. Country-by-country guidance is planned as a future addition to this site.

Common Self-Billing Invoice Mistakes

No written agreement

Self-billing without a prior agreement between the parties is the fundamental failure — everything else follows from it.

Both parties invoicing

If the supplier also raises an invoice for the same supply, the transaction is recorded twice.

Numbering collisions

Self-billed invoices need their own agreed series, or they will clash with the supplier’s own numbering.

Assuming it is allowed

Whether self-billing is permitted, and under what conditions, is set by national tax rules. Verify before adopting it.

Self-Billing Invoice Best Practices

1Put the self-billing agreement in writing before the first invoice, and record its reference on each one.
2Agree a dedicated numbering series and stick to it.
3Send each self-billed invoice to the supplier so they can check and record it.
4Set a review point — self-billing agreements go stale as arrangements change.
5Confirm the conditions your jurisdiction attaches to self-billing before you start.

Self-Billing Invoice FAQs

What is a self-billing invoice?

An invoice the customer prepares on the supplier’s behalf, in the supplier’s name, under a written agreement between the two parties. Both sides treat it as the supplier’s invoice.

Is self-billing allowed?

It is permitted in many jurisdictions but subject to conditions — typically a prior written agreement and specific content requirements. The rules differ by country, so check your national tax authority’s position.

Who is responsible for the tax on a self-billed invoice?

Responsibility for correctly accounting for the tax generally stays with the supplier, even though the buyer produced the document. Because this varies, confirm the position that applies to your arrangement.

Should the supplier also issue an invoice?

No — that is the point of the arrangement. Under a self-billing agreement only one invoice exists for each supply, and it is the self-billed one.

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