Meaning of Billing Address

Anyone who creates invoices that are not immediately paid in cash needs the customer’s billing address. In this article, we summarize what you need to pay attention to.

Definition

The billing address is the address to which the invoice is issued. It is therefore the address of the person who will ultimately pay the bill or who is responsible for the payment. Of course, it can also be the address of a company. The address can differ from the delivery address and must be stated on the invoice.

A correct billing address is not only important for the delivery of the invoice, but also for payment reminders and, if necessary, reminders .

Billing address – components and example

Basically, a complete billing address consists of the name and address (street, house number, postcode and city) of the person. In the case of companies, the name of the company is given and, if applicable, also the person to whom the specific invoice is being sent, for example with the phrase “for the attention of Ms. Musterfrau”. Alternatively, you can also specify the department concerned.

If an invoice is not sent within Germany, the respective destination country must also be specified.

Examples

For example, a private person’s address can look like this:

Ms. Musterfrau
Musterstrasse 1/10
77652 Offenburg
Germany

The address of a company can be given as follows:

Sample company GmbH z.H. Mrs. Example
Musterstrasse 1/10
1010 Vienna
Austria

That sounds banal at first, but why a correct billing address is particularly important is explained in the next paragraph.

Importance of the correct billing address

During the quick, manual creation of an invoice, it can occasionally happen that the address is misspelled. The corollary is that the bill may not arrive.

This means that a payment reminder will be sent a little later – this time to the correct, flawlessly typed address. This causes astonishment and resentment among customers who have not yet received an invoice, after all, they have not yet received an invoice, but a payment reminder or even a reminder. This approach makes a bad impression, which is why it is important that the billing address is always correct – right from the first letter that is sent to the customer.

If the address is generally given incorrectly, this can potentially lead to further problems. The person may then no longer be available and it will be difficult to deliver the invoice or payment reminders and reminders. It is therefore important to clarify the actually correct billing address early on in order to be on the safe side that the bill will actually be paid later.

Another case in which the correct billing address is particularly important are gifts. For example, if someone orders a gift online, it should be delivered directly to the recipient, but of course no invoice should be included in the package. In this case, the billing and delivery addresses are different – and an error in the billing address would be particularly embarrassing and uncomfortable.

Billing address vs. delivery address: that’s the difference

The difference between the billing address and the delivery address is easy to explain. The delivery address is the address to which the ordered products are sent or delivered in any other form. However, the billing address can be a different address, namely that of the person who takes care of paying for the products ordered.

The scenarios in which the billing and delivery addresses are different can be varied. One example has already been mentioned when, for example, gifts are ordered online and the invoice is not to be sent along.

Another possibility is the area of ​​business-to-business dealings. Here it happens that invoices have to be sent directly to the accounting department in the company headquarters, whereas the purchased goods are sent to other locations. In this case, the correct billing address is very important, as otherwise cumbersome bureaucracy and avoidable payment delays can result.

Many larger companies also have specific billing addresses that are used like a post office box. From there, the incoming documents are centrally recorded, scanned and processed. If an invoice is not sent to the correct billing address, this not only leads to delays, some companies even charge the supplier a processing fee if there is an error in the billing address.

Subsequently change and rewrite the billing address

The subsequent adjustment of invoices is generally problematic. In day-to-day business it is often done with the indication that the previously sent invoice should be deleted or ignored and that this is now the invoice that is really valid. While this practice is widespread, it is actually not correct.

Invoices that have been sent once must be archived unchangeably in accordance with legal requirements (UStG, GoBD). This means that an invoice that has been sent cannot be adjusted, but must be archived in exactly the same way.

Subsequently, a cancellation invoice must be created so that it is clear that the invoice that has already been sent has been correctly canceled. A new invoice can then be issued for the desired billing address.

The disadvantage of this approach is that it naturally means effort and at the same time the payment of the invoice is further delayed. When canceling the previous invoice and issuing a new invoice, the customer can be advised that the payment deadline must be adhered to.

By the way: If a customer just doesn’t want to pay the invoice himself, there is no need to re-issue an invoice to the person who ultimately pays the invoice, because the invoice sent was actually correct.

Tip!

Everything else you need to know about changing invoices later can be found in our article on invoice correction !

Conclusion

The billing address may sound trite at first, but an incorrect address can cause massive problems. Payment delays and additional work that could have been avoided mean unnecessary costs for the company (and possible annoyance for customers!). It is therefore important to structure the entire accounting process well. It must be ensured that the billing address is always given correctly, that there are no misunderstandings and that error rates are minimized.

If a billing address has to be changed at a later date, it is important to proceed correctly and not just change the address, but to correctly cancel the previously sent invoice and send another invoice.

Billing Address