Invoice method or cash method for your Swedish AB?

You sent an invoice on 28 September for SEK 80,000 plus SEK 20,000 in VAT. The customer has 30 days to pay, and on 12 November your third-quarter VAT is due. Whether that SEK 20,000 belongs in this return depends on a choice you may have made in thirty seconds when you registered the company.

Two methods, and three names that confuse things

Under faktureringsmetoden, the invoice method, you record every invoice twice. First as a receivable or payable when it is sent or arrives, then again when it is paid. The Swedish Tax Agency, Skatteverket, calls it the main method in the Bookkeeping Act.

Under kontantmetoden, the cash method, you wait until money actually moves. You may use it if the company’s annual net turnover is normally no more than SEK 3 million, under chapter 5, section 2 of the Bookkeeping Act. The word “normally” means one unusually good year does not force a switch, but if you are steadily above the limit the choice has been made for you.

Now the names. Kontantmetoden is what the method is called in bookkeeping. For VAT the same thing is called bokslutsmetoden, literally the year-end method, and according to Verksamt a company that keeps its books on the cash method reports VAT that way. So it is one choice, not two.

The difference shows up in your VAT return

Back to the invoice from 28 September. Assume you report VAT quarterly and the customer pays on time, on 28 October.

With the invoice method, VAT goes into the period when the sale is recorded, which is the third quarter. The SEK 20,000 must be paid by 12 November. That works if the customer behaves, but if they pay three weeks late you have fronted the VAT from your own account.

With bokslutsmetoden, VAT goes into the period when you get paid. The money arrived in October, so it lands in the fourth quarter. Skatteverket’s rule is that quarterly VAT must be filed and paid by the 12th of the second month after the period, which here means 12 February 2027. Same invoice, same customer, three months apart.

It works the same in the other direction. A supplier invoice for SEK 40,000 plus SEK 10,000 in VAT that you receive in September and pay in October gives you the deduction in the third quarter under the invoice method. Under bokslutsmetoden you wait until the fourth.

At year-end the two methods nearly converge

This is the part people miss. Even on the cash method, all unpaid receivables and payables must be recorded at the end of the financial year. It says so in the same section of the law that lets you wait. And in the last VAT period of the year, Skatteverket requires you to report VAT on unpaid invoices too.

If your financial year is the calendar year, an invoice you send in December ends up in the fourth quarter whichever method you use. The deferral exists during the year, not across the year-end.

That matters right now in October. If you are working out salary and dividend before the year closes, books kept on the cash method do not show the full picture. Invoices you have sent but not been paid for are missing from the result, and so are supplier invoices you have not yet paid. Add them by hand before you trust the number.

How I would choose

If you send a few invoices a month, your customers are businesses on 30-day terms or longer, and your purchases are small, stay on the cash method. You avoid fronting VAT and you record each invoice once instead of twice. A consultant with two or three clients is the typical case.

If you have many customers, or have ever searched your inbox to work out who has not paid, choose the invoice method. Receivables are visible in the books, and the result is right during the year, not only at closing. Your software handles the double entry, so the extra work is smaller than it sounds.

If you buy a lot on credit and get paid immediately, for example a web shop taking card payments, VAT also argues for the invoice method. You get the deduction on purchases earlier, while the VAT on sales is reported straight away either way.

Switching is easy in one direction only

To move to the invoice method you file an ändringsanmälan, a notification of change, in Skatteverket’s e-service on Verksamt and state that the method should apply from the first day of a month. Skatteverket describes this under VAT accounting methods.

Going the other way is hard. If you are on the invoice method you must apply to Skatteverket to move to bokslutsmetoden, and the same page says you can normally only switch if the business changes fundamentally. Treat a move to the invoice method as permanent.

So start by checking what the company is actually registered for. Log in to Verksamt or look at the registration certificate from Skatteverket, see which VAT accounting method is listed, and compare it with how you have kept the books this year. If they do not match, that needs correcting before the return on 12 November, and if you are unsure how to correct it, call Skatteverket.