Invoice payment process

This topic is a linked part of a larger work: “Edgeryders OÜ Company Manual


1. Introduction

2. Steps for regular collaborators

3. Steps for occasional collaborators

4. Steps for Edgeryders OÜ

1. Introduction

Process overview. Edgeryders’ decentralized accounting happens on Every regular collaborator has an account there, using it to request all their payments from Edgeryders. This refers to both payments for invoices (when you invoice for your services on a contractual basis) and payments for the reimbursements of expenses (treated here).

No urgent payment requests, please. Make your payment requests early, because we don’t want to hurry our process for “emergencies”. (We will do so to avoid formidable catastrophes, but we will be annoyed :smiley:) Your regular payment request needs up to a few days to be authorized by your project manager, until the Monday after for the payment to be made, and the usual time for bank transfers for the payment to arrive. (One bank working day to EU / SEPA countries, more to others.)

The process documented below is our suggestion for the default process. Project managers are largely free to organize their projects as they want, so they can choose a different process, esp. with good reasons. The only constant element is that bills have to end up in FreeAgent together with the “AUTHORIZED” note by the project manager (see below), because that is the interface to the Edgeryders payment manager.

Complain early about bad process. Whether it’s the default process documented below or a different one chosen by your project manager – if it works badly, it is your duty to complain early so that adaptations can be made before a project becomes an unenjoyable mess. Remember, it’s never the person, it’s always the process that is at fault. :slight_smile:

2. Steps for regular collaborators

Follow the steps in all sub-sections, in the order they appear. The first three sub-sections are only relevant for the setup, during the first time you submit a bill.

2.1. Setup: Get a Dynalist account

Follow our Dynalist Manual, section “2. Getting started with Dynalist”. This will give you access to the “Edgeryders Tasks” dynalist, which you will need in the process below.

2.2. Setup: Get a FreeAgent account

Ask an Edgeryders director (preferably @matthias, @alberto, @noemi, otherwise also @johncoate or @nadia) to create a FreeAgent account for you. Just message them here on the platform and include your full name, e-mail address and if you need to send reimbursement requests or also invoices. Once your account has been created, you will receive an automated notification e-mail with an activation link to set your account password.

(Note to directors: Only Edgeryders directors can create FreeAgent accounts as creating FreeAgent accounts requires permission level 7 “Tax, Accounting & Users”. To create the account, go to “user menu → Settings → Users”. Set the new account to permission level 2 “My Money” for reimbursements only or 5 “Invoices, Estimates & Files” for reimbursements and invoices.)

2.3. Setup: Add your payment info

Log in, find your name under “main menu → Contacts”, and click on it. Add a “Note” and add your bank account data there. It should look like this:

Bank account information
account holder:
bank name:
bank address:
account currency: EUR

The currency of the bank account should be included so we can decide on the payment method that offers the lowest fees. For non-EU bank accounts, replace the IBAN line with your account number and sort code, or whatever your national bank account scheme uses.

2.4. Write your invoice

Invoice template. You can copy or download our invoice template and fill in your information, or put the same information into your own template. The EU provides a good overview of all regulations that apply to information required on invoices.

No cross-project invoices. In one invoice, only invoice for services provided for one Edgeryders project. Otherwise we can’t properly add it to our accounting software.

VAT amount. In almost all cases, the correct way is to put zero VAT on your invoice. Details: The VAT to include depends on what type of supplier you are, and your country of residence. Good authoritative sources of information are (from simple articles up to the full portal):

The major cases are:

  • Add no VAT if you are invoicing for any services from a company registered in a member state of the European Union except Estonia (where Edgeryders OÜ is registered). Edgeryders will apply the reverse charge procedure for this case (see below). This applies independently of the type of service you invoice for (electronic, digitally supplied, or not) and independently of where you provided the service (in the country of the service provider, of the customer, or another country) and also independently of your own VAT status (VAT liable with EU VAT ID, VAT liable without EU VAT ID, or VAT exempt). Source:

    The place of taxation is determined by where the services are supplied. […] The supply of services between businesses (B2B services) is in principle taxed at the customer’s place of establishment. (source)

    There are some exceptions from this rule, documented here. The most relevant cases from there are for us:

    • B2B and B2C restaurant and catering services, other than those supplied on board ships, aircraft or trains during the section of a passenger transport effected within the EU, are taxed at the place where the services are physically carried out [Article 55 of the VAT Directive]

    • B2B services in respect of admission to cultural, artistic, sporting, scientific, educational, entertainment and similar events will be taxed at the place where those events actually take place [Article 53 of the VAT Directive]

    (What are services anyway? In general, consider anything a service that is not just about selling a physical product, or a product and its installation. Catering is a service. Not sure if a print job is a service. We did not yet find any official EU definition of “service”.)

  • Add no VAT if you are invoicing for services from outside the European Union. Relevant so-called “authoritative” information has been found here:

    If you receive services for business purposes from a supplier based outside the EU, you should usually pay VAT at the applicable rate in your country, as if you had supplied the service yourself (using the reverse charge procedure).

    You can usually deduct this amount later on when you make your VAT declaration.

    It does not matter if the services are “digital services” or not, that distinction is only relevant for B2C sales.

  • Add no VAT if you are invoicing for physical goods from a member state of the European Union except Estonia and you send the goods across a border (source). To write us an invoice without VAT for this case, you need to include our VAT ID: EE101972833.

  • Add no VAT if you are invoicing for physical goods from outside the European Union and you send the goods across a border. This is an import / export trade, where usually no local VAT is applied but we’ll have to pay EU import VAT at the point of customs.

  • Add your country’s VAT if you are invoicing for physical goods from a member state of the European Union except Estonia and you do not send the goods across a border (derived from here). Example: Edgeryders ordered a print job in Belgium, for delivery inside Belgium. In this case, Edgeryders OÜ will not be able to get the VAT back, as we are not registered in Belgium.

  • Add your country’s VAT if you are invoicing for physical goods from outside the European Union and you do not send the goods across a border. For example, when we purchase items in person in your shop.

  • Add 20% Estonian VAT if you are a company registered in Estonia and your company is not exempt from VAT.

Reverse charge info. If you are invoicing Edgeryders from outside Estonia for services, Edgeryders OÜ is liable for the VAT payment due to the reverse charge procedure. According to EU rules, you must include the following additional information on your invoice:

  • The VAT ID of Edgeryders OÜ: EE101972833
  • The words “reverse charge”. Embedded in a sentence of your choice, if you want.

Due to reverse charge, in these cases the VAT amount does not depend on the VAT status of your business (VAT liable with EU VAT ID, VAT liable without EU VAT ID, or VAT exempt). You always zero-rate VAT on the invoice and Edgeryders will pay (and get back) Estonian VAT corresponding to your invoiced amount.

2.5. Submit your invoice for payment

For that, you have to add your invoice in FreeAgent (there called “bill”) and create a Dynalist task for its authorization:

  1. Go to "Bills → Add New Bill in FreeAgent. (In detail: click on “Bills” in the FreeAgent main menu, then on the “Add new bill” button in the top right.)

  2. Fill into “Supplier Contact” your name, selected from the dropdown.

  3. Fill into “Reference” the number or reference on your own invoice. This is needed to facilitate auditing of accounting data.

  4. Fill into “Comments” a short description of the services you performed, for example: “community management”. Usually, do not include the project name, as it will be included in its own field already.

  5. Fill in the “Bill Date”. Usually you leave it as it is, the default being the present day. However, if you created your invoice in the past, fill in that day of course.

  6. Fill in the “Due Date”. Set it to the current date (where you upload the invoice to FreeAgent) to indicate that your invoice is due immediately. Otherwise, if you leave it at the default “invoice date plus one month”: that’s nice of you as it means you are ok with us paying you a month later :wink:

  7. Fill into “Total Value” the invoice amount in Euros. If your invoice is in a different currency, convert the total to Euros. For that, use the X-Rates Historic Lookup tool with the date of your invoice. Keep the link of your conversion, you need it later. (Other suitable but less great tools: XE Historical Currency Rates and ECB Currency Converter.)

  8. Fill in the contained Estonian VAT amount that is contained in your invoice. The field will default to 0% VAT and 0% is almost always the right value. Because this field is only for Estonian VAT, not for example for Nepali VAT in case Edgeryders purchased a physical product from you inside Nepal.

  9. Select in “Category” the entry “Cost of Sales → Collaborators”. (:warning: This is important since it has affects if Edgeryders can deduct the expense from its taxable profits.)

  10. Fill into “Comments” relevant additional information about the bill, if any.

    • If your original currency is not Euro, include the link to the conversion you did. It has to include the date, and if possible the amount (example).

    • If for some reason you want your invoice to be paid later, make this very visible by putting something like “NOT TO BE PAID IN 2018” at the beginning of the comment (and also adapt the “Due Date” field accordingly).

  11. Select in “Link to Project” the entry for the project you are working on.

  12. Leave the default “This Bill recurs” value which is “Does not recur”.

  13. Upload in “Attachment” the file of your invoice in PDF file format.

    If your invoice is about a Horizon 2020 project, note that it has to include a timesheet, according to this process (in there, section “2.2. Creating an invoice for your worktime”).
    For Horizon 2020 projects, the rate is 41.86 euros per hour. To calculate your bill, multiply the number of hours worked by 41.86. Be sure to cross-reference with your yearly contract to ensure you are billing the correct number of hours per year to add up to your salary. e.g. 14,400 euros/year = 344 hours * 41.86 euros. Your quarterly bill needs to match your hours reported.

  14. Click on “Create and Finish”.

  15. Create a Dynalist task for authorization. Visit the “Core: Administration → Current: Payment Tasks” node in Dynalist and add a task there according to this example:

    !(2018-12-01) Approve Log in to your FreeAgent account . #matthias

    The task has to contain, in this order:

    • A deadline. Usually the next Sunday, because Monday is our payment day. Enter the deadline by pressing ! and choosing it from the popup.
    • A task text with link to the FreeAgent bill. To find that link in FreeAgent, go to “Bills”, right-click on the reference corresponding to your bill, and choose “Copy link address”.
    • An assignment to your project manager. This is a #tag using the username of your project manager, for example #matthias to assign to @matthias. Our system makes sure that your project manager is automatically notified of the new task.

3. Steps for occasional collaborators

This is a simplified process for collaborators who will, as far as it can be foreseen, send us at most three bills in total. It does not need them to get a FreeAgent or Dynalist account, and can also be used by all collaborators while they do not have either a FreeAgent or Dynalist account.

  1. Create your invoice as a PDF. See the instructions for our regular collaborators (above) for a template and details about what VAT to charge.

  2. E-mail the invoice to your contact person at Edgeryders. This is simply the person from Edgeryders who contracted the service from you. They will care to enter it into the Edgeryders accounting system and authorize it, and the Edgeryders payment manager will then pay it.

4. Steps for Edgeryders OÜ

(If you only wanted to submit your bill to Edgeryders for payment, you can stop reading here. The following is only for staff of Edgeryers OÜ.)

The project manager is the person managing the Edgeryders project to which a bill refers. The payment manager is the Edgeryders management board member executing the payments from the bank account.

  1. Project manager: Make sure you are registered on Dynalist Companion. Otherwise, you will not get the automatic notifications about new payment authorization tasks for you. See our Dynalist Manual in section “4. Get notifications about new tasks” for instructions.

  2. Project manager: Register the bill in FreeAgent (if needed). This is only necessary for bills submitted via e-mail by occasional collaborators, our accountants etc… Everyone else registers it as a bill in FreeAgent themselves. Use the “steps for regular contributors” in analogy to register the bill in FreeAgent.

  3. Project manager: Check and approve the bill. Check that the invoiced service has been delivered, any forex conversion is correct, and that the bill is correctly recorded and linked to your project in FreeAgent. To approve it, edit the bill record in FreeAgent and add to the beginning of the comment field, with the current date and your firstname:

    (APPROVED [yyyy-mm-dd] by [name])

  4. Project manager: Check off the Dynalist task. The one that told you to approve the bill.

  5. Payment manager: Pay all approved bills on the next Monday. But do not just pay blindly: ask the project manager for explanations if there is anything you do not understand.

    You can find all open bills around the top of the “Bills” page, and see which ones are approved right on that page, without having to visit each bill. Tip: Ctrl+F and search for “approved” to highlight all approved invoices.


I think it’s the same as this process, just that we need to simplify it and integrate it into a new manual for Edgeryders OÜ finances.

Yep, figured so. But ideally people working with us would be just sent this standalone thing, even if we included in the whole manual. This is to decentralize collection of invoices and uploads by the core team - each collaborator would have access to freeagent.

That’s how it always worked. So what you want is a copy of this process in a standalone topic, to not confuse collaborators with the rest of the finance management manual?

Matt: the idea is of a sort of “collaborator’s pack”. Upon signing on (a contract, typically), people would receive instructions for how to carry out admin tasks on their own work.

We did give people access, but were never explicit enough in setting up this stuff as a duty. Until recently, even some directors had never logged into FreeAgent for OÜ.

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Good idea. Let’s just try to create as little duplicate content in our instructions / manuals as possible, as this tends to get out of sync / needs more effort to maintain.

Maybe they did not have payment requests / expense claims to upload yet? :wink: If there are other duties that have not yet been made explicit, let me know and I will write them down. It’s just that I can’t live with fuzzy expectations …

As the Arthur case taught us, it is every shareholder’s responsibility to keep an eye on the money side of the company. I cannot get over how most of us, after that experience, seem happy to let me become another Arthur! We fought hard for information transparency, it is surprising that, now that it’s there (fancy accounting reports generated on the fly!) no one seems to care. A year ago I offered a session to show you how to read a simple balance sheet, and no one was interested. :worried:

Makes sense. One more case for better processes then. (“Responsibility” is a concept largely absent from my mind … it only produces stress, and I have enough stress even without it. I design, follow and automate processes.)

For example, two more directors (including me …) can take on payment tasks, which will make them at least log in regularly to the accounting and make them aware when mess accumulates there. I’ve heard that banks in Estonia offer getting an account without travel now, so hopefully ours does to.

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I offered to do it too. I would actually not mind that work at all, it just means less time for what we often consider more important work. Which is something being redefined - in the company and for me personally too.

where to notify now the new unpaid bills since there is no collaboratory till now.

ping @zmorda

I assume Dynlist, as this is the task place to be now.
but I believe we need to update the post

Sorry @hazem, I think @matthias has changed Collaboratory into Documentation (Documentation & Support - Edgeryders)?? If so, I will change this instruction page. Maybe also make it a community wiki?

Let me know, now’s the time since Anique will also need to be onboarded.

Hmm no, I just removed “Collaboratory” completely, as it was empty after the move to Dynalist. I’ll update the text above accordingly now, and make it a wiki.

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I guess this is the link where the claims should be made? Or solely on Dynalist?

That category is only for documentation … putting payment requests inside would clutter it too much. I have updated the instructions above now, have a look if it works for the purposes here.

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It works, thanks! And for formatting the wiki properly, I find it harder with this discourse editor than before.
I have one doubt about freeagent users at Level 2 as they are now - not sure if indeed they can add contacts. Perhaps its better that we add them prior to beginning working.
But if the categories names change more in the future… well we ourselves wont find where stuff is :slight_smile:

thanks for the updates.
and yes I can add new contacts, but I can’t add expenses to their account, can only add a bill.

on the new contact page, add new drop down menu, i have bill, project, invoice, estimate.

so can’t add Simon’s travel as “expenses” in the freeagent for now.

That makes sense. The idea is that Simon adds it himelf if he wants to be reimbursed. (That said, there’s nothing against upgrading you and other core collaborators to more privileges in FreeAgent when the need for that arises.)

Ideally collaborators should add themselves as Contacts and upload themselves bills and reimbursement requests.
By collaborators we mean people like you, Hazem, in an official project capacity. You can do this for yourself - upload your own reimbursement requests right?

In Simon’s case, and anyone in OpenVillage other than the project team (=collaborators) - all of the people we reimburse or whose one-off services we pay for are managed by the project manager. Which means it’s easier that you to upload a bill from Simon - not Expense, without him having access to all this information.

I uploaded bills for all the festival participants… otherwise it would have been admin nightmare…

That (booking non-invoice payment requests as bills) is a nice trick that will be handy at times. I should document it :slight_smile:

But I don’t really understand why it’s needed in this case? You can also create expense reimbursement requests for anyone else, with the added benefit over bills that FreeAgent sums up all claims automatically (in case there are multiple expense records, belonging to different expense categories).