Note: This article covers invoice issuance requirements under Japan's Invoice System and Electronic Books Preservation Act, which are specific to businesses operating in Japan under Japanese law. The information below will not be directly relevant if you are not selling in the Japanese market.
If you run an e-commerce site on Shopify, you may sometimes be asked by corporate customers to "issue an invoice." However, Shopify's basic functionality alone cannot issue invoices that match Japanese business customs.
"How do I issue invoices on Shopify?"
"What invoicing apps are available for Shopify?"
"Is there a connection between e-commerce invoices and the Electronic Books Preservation Act?"
Reading this article will resolve the questions and needs above.
Since invoice issuance is related to tax law, handling it incorrectly could result in significant losses.
In this article, we clearly explain the cases where invoices are needed on Shopify, an overview of the Invoice System and Electronic Books Preservation Act, and invoicing apps.
We hope this helps with your store operations.
When Do You Need an Invoice on Shopify?
For e-commerce sites aimed at general consumers, requests for invoices are rare.
However, when corporate customers or sole proprietors make purchases for business purposes, or when your Shopify store handles B2B transactions such as wholesale or credit sales, you may be asked to issue an invoice (particularly a Qualified Invoice compliant with the Invoice System).
For stores that anticipate this kind of demand, it's important to set up an invoicing system in advance.
Shopify's Basic Functionality Does Not Include Invoice Issuance
Shopify does not come with a built-in function to issue invoices as standard. It does have a function for issuing packing slips, but these cannot be used as "invoices" as they are.
When invoices are needed, it's common to use an invoicing app or accounting software.
The Invoice System and Electronic Books Preservation Act You Should Understand Before Issuing Invoices
When issuing invoices, the Invoice System and Electronic Books Preservation Act are the main relevant laws. Let's make sure we understand these systems and laws properly.
What Is the Invoice System?
The Qualified Invoice Retention Method, commonly known as the "Invoice System," is a new consumption tax rule that began in October 2023.
In order for taxable businesses to claim the purchase tax credit, they need to retain an "Invoice (Qualified Invoice)."
To be considered a valid invoice, the following items must be included.
- The name of the recipient to whom the invoice is issued
- The name of the seller (your company) and its registration number
- The date of the transaction
- Details of the transaction
- The total consideration subject to each of the 10% and 8% rates, and the applicable tax rates
- The total consideration subject to each of the 10% and 8% rates, and the consumption tax amount for each
Reference: National Tax Agency website: About the Invoice System
If any of these items are missing, the document is not considered a valid invoice, and the recipient (if a taxable business) cannot claim the purchase tax credit. This means the consumption tax the buyer paid can no longer be deducted, increasing their costs by that amount.
If you do not issue invoices, or have not registered as a Qualified Invoice Issuer, customers may avoid purchasing your products, resulting in lost sales opportunities.
To avoid this situation, if you deal with taxable businesses in contexts such as B2B transactions, be sure to register as a Qualified Invoice Issuer.
Note that registering as a Qualified Invoice Issuer takes about 1 to 1.5 months, so we recommend completing the application in advance.
What Is the Electronic Books Preservation Act?
The Electronic Books Preservation Act sets rules for retaining national tax-related documents, such as invoices and receipts, as electronic data. Following a 2022 amendment, it now applies to nearly all businesses, and after a grace period, became mandatory from January 2024.
When issuing invoices as electronic data (PDF), the issuer also has a retention obligation under the Electronic Books Preservation Act.
When retaining electronic invoices issued via Shopify, you must also comply with the requirements set by the Electronic Books Preservation Act. The main points are as follows.
- Implement measures to prevent tampering
- Provide a display, printer, or other equipment for viewing the retained data
- Enable searches by the three elements of "date, amount, and business partner"
For details, please check the National Tax Agency website.
3 Ways to Issue Invoices on Shopify
There are mainly three ways to issue invoices on Shopify.
1. Issue via a Shopify App
Using an invoicing app that integrates with Shopify, you can automatically create and send invoices from order information. This is highly efficient and recommended for stores with B2B transactions or a high frequency of invoice issuance.
Note that some apps may require customization or charge a monthly fee.
2. Issue via Accounting Software
Many accounting software packages have an invoice issuance function. By integrating with Shopify's order data, you can manage your shop's accounting information as well as create and issue invoices.
While this can streamline accounting work, it requires some familiarity with initial setup and operation. Also, if the accounting software doesn't integrate directly with Shopify, data integration takes extra effort.
This method suits medium-to-large stores and corporations.
3. Manually Create and Issue a PDF
This method involves creating an invoice using Excel, spreadsheets, or a template based on order information, converting it to PDF, and sending it to the customer. It costs almost nothing, but is labor-intensive and error-prone, making it suitable for small stores that rarely need to issue invoices.
3 Recommended Invoicing Apps for Shopify
Here are three carefully selected invoicing apps for Shopify.
Shopify Order Printer
Image source: Shopify Order Printer | Shopify App Store
Shopify Order Printer is an official document-printing app provided by Shopify. With Shopify Order Printer, you can issue invoices, packing slips, receipts, and more from order information. Its biggest advantage is that it's free to use.
However, there are two points to note. First, the interface is not available in Japanese — only English is supported, so those uncomfortable with English may need to use a translation tool. Second, customizing the document format requires knowledge of coding such as HTML and CSS. Customization is essential, especially for issuing invoices compliant with the Invoice System.
If you can't customize it yourself, we recommend purchasing a template from a vendor that sells them.
For more details on Shopify Order Printer, please see the article below.
Mixlogue Quick Order Printer
Image source: Mixlogue Quick Order Printer | Shopify App Store
Mixlogue Quick Order Printer is a document-issuance app provided by a Japanese company, with an interface available in Japanese. It requires no specialized knowledge and is easy to operate.
It can also issue invoices compliant with the Invoice System, including support for logos and seal images. The app's monthly fee is $9, with a 7-day free trial period.
If you'd like to learn more about Mixlogue Quick Order Printer, please also refer to the article below.
SAKU Simple Receipt
Source: SAKU Simple Receipt | Shopify App Store
"SAKU Simple Receipt" is a Shopify app that lets customers themselves issue "receipts," "invoices," "quotes," and "delivery notes." By letting customers download these documents, it reduces the burden of tedious document-issuance work on the store side.
Its features include being affordable and easy to use even for stores just starting out with low sales volume, and support for Japan's unique Invoice System and reduced tax rate.
The blog article below explains the features, pricing plans, and setup method of SAKU Simple Receipt in detail. Please use it as a reference.
freee Accounting Is Well Suited for Integration With Shopify
Image source: freee Accounting
For medium and large B2B shops, issuing invoices through accounting software is also a good option.
The accounting software freee Accounting can integrate with Shopify and issue invoices based on Shopify's order data. freee Accounting also supports the Invoice System and Electronic Books Preservation Act.
The annual fee starts at 35,760 yen for corporations and 11,760 yen for sole proprietors, varying by scale.
For details on how to integrate Shopify with freee Accounting, please see the article below.
If you use Money Forward Cloud Accounting or Yayoi Accounting, you can integrate by exporting Shopify's order data as a CSV file and importing it into each accounting software. For detailed instructions, please check the support resources for each accounting software.
Check the Systems and Laws Governing Invoices to Issue Them Properly
This article explained how to issue invoices on Shopify, the related systems and laws, and invoicing apps.
Businesses running B2B-oriented e-commerce sites will likely have particularly frequent opportunities to issue invoices. Failing to comply with the relevant tax laws could result in lost sales opportunities or penalties during a tax audit.
Use this information as a reference to comply with the law and consider the invoice-issuance method best suited to your business.
