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Self-Billing Agreement Form

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SELF-BILLING AGREEMENT

This Self-Billing Agreement (the "Agreement") is made effective as of Effective Date: by and between Principal Name: with Principal Address: , and Supplier Name: with Supplier Address: .

RECITALS

WHEREAS, Principal conducts procurements of goods and/or services and wishes to issue invoices on behalf of certain suppliers for administrative efficiency; and

WHEREAS, Supplier supplies goods and/or services to Principal and agrees, subject to the terms and conditions of this Agreement, to permit Principal to issue self-billed invoices in respect of such supplies; and

WHEREAS, the parties intend that self-billing invoices issued by Principal shall constitute valid invoices for tax and accounting purposes in accordance with applicable law and the parties' obligations.

NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties agree as follows:

1. DEFINITIONS

1.1 "Self-Billed Invoice" means an invoice prepared and issued by Principal on behalf of Supplier setting out the supplies of Goods or Services made by Supplier to Principal and specifying amounts payable by Principal to Supplier.

1.2 "Goods and/or Services" means the products, materials, and/or services described by Supplier in the Supplier Description field:

1.3 "VAT" means any value added tax, goods and services tax, or similar turnover tax imposed by any relevant taxing authority.

2. SCOPE

2.1 Subject to the terms of this Agreement, Supplier hereby authorizes Principal to prepare and issue Self-Billed Invoices in respect of supplies of Goods and/or Services provided by Supplier to Principal from and after the Effective Date.

2.2 Self-Billed Invoices shall be issued at the following frequency: and shall state the description, quantity, unit price, VAT where applicable, and total payable.

3. OBLIGATIONS OF PRINCIPAL

3.1 Principal shall issue Self-Billed Invoices on its own stationery or by electronic means that clearly identify the invoice as self-billed and shall include Supplier's trading name, Supplier VAT registration number: , the supply description, the invoice date, and amounts due.

3.2 Principal will make available copies of issued Self-Billed Invoices to Supplier on request and shall retain complete and accurate records of all Self-Billed Invoices for a period required by applicable law.

4. OBLIGATIONS OF SUPPLIER

4.1 Supplier warrants that it is properly registered for VAT where required and that the details supplied to Principal are correct and complete. Supplier Registration Number:

4.2 Supplier shall notify Principal in writing of any change to its VAT registration status, legal name, address, or other details affecting issuance of Self-Billed Invoices within days of such change.

4.3 Supplier confirms and authorizes that Principal may issue Self-Billed Invoices on Supplier's behalf: Supplier authorizes Principal to self-bill.

5. VAT, TAX AND ACCOUNTING

5.1 Supplier acknowledges that Self-Billed Invoices issued by Principal are intended to constitute the tax invoice for the supply and that Supplier will account for VAT in accordance with applicable law. Supplier remains responsible for the accuracy of VAT treatment and for payment of any VAT due.

5.2 If any Self-Billed Invoice is found to be incorrect, the parties shall promptly issue corrective documentation. Where VAT or other tax liabilities arise as a result of incorrect information supplied by Supplier, Supplier shall indemnify Principal for any resulting liability, penalties, interest and costs.

6. PAYMENT

6.1 Principal shall pay amounts stated on Self-Billed Invoices in accordance with the agreed payment terms: Payment Terms: from the date of the Self-Billed Invoice unless otherwise agreed in writing.

6.2 Payment shall be made by bank transfer to the account specified by Supplier. Supplier Bank Details:

7. RECORDS, AUDIT AND ACCESS

7.1 Each party shall keep full and accurate records relating to supplies covered by this Agreement for a minimum period required by law and shall permit the other party or an independent auditor, on reasonable notice and during normal business hours, to inspect those records to verify compliance. Notice for audit shall be given at least days in advance.

8. TERM AND TERMINATION

8.1 This Agreement shall commence on the Effective Date and shall continue until terminated by either party on not less than days' written notice to the other party.

8.2 Either party may terminate this Agreement immediately if the other party commits a material breach and fails to remedy such breach within 14 days of written notice, or if the other party becomes insolvent or subject to an insolvency event.

9. LIABILITY AND INDEMNITY

9.1 Each party's liability under or in connection with this Agreement shall be limited to direct losses arising from its negligence or wilful misconduct. Neither party shall be liable for indirect, special or consequential loss, except in respect of liability for tax, fraud or willful misconduct.

9.2 Supplier shall indemnify and hold harmless Principal from and against any claims, liabilities, penalties, fines, costs and expenses arising from Supplier's incorrect tax treatment, failure to notify changes in registration status, or breaches of representations given in this Agreement.

10. CONFIDENTIALITY

10.1 Each party shall keep confidential all information disclosed by the other party in connection with this Agreement and shall not use such information except for the purposes of performing its obligations under this Agreement. This obligation shall survive termination for a period of three years.

11. NOTICES

Notices under this Agreement shall be in writing and delivered by hand, registered post, or courier to the addresses set out below or to such other address as either party may notify in writing.

12. AMENDMENT, WAIVER AND COUNTERPARTS

12.1 No amendment to this Agreement shall be effective unless in writing and signed by duly authorised representatives of both parties.

12.2 The failure or delay by either party to exercise any right under this Agreement shall not operate as a waiver of that right. This Agreement may be executed in counterparts, each of which shall constitute an original and all of which together shall constitute one and the same instrument.

13. GOVERNING LAW, ENTIRE AGREEMENT AND SEVERABILITY

13.1 This Agreement shall be governed by and construed in accordance with the laws of the jurisdiction specified here: , without regard to its conflict of laws principles.

13.2 This Agreement constitutes the entire agreement between the parties with respect to the subject matter and supersedes all prior agreements, understandings and arrangements between the parties, whether oral or written.

13.3 If any provision of this Agreement is held to be invalid, illegal or unenforceable, the remaining provisions shall remain in full force and effect.

SIGNATURES

Principal Name:

By:

Date:

Supplier Name:

By:

Date:

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What a Self-Billing Agreement Form Is

A Self-Billing Agreement Form is a written contract where a buyer agrees to prepare and issue invoices on behalf of a supplier for delivered goods or services. The form sets invoicing format, pricing and adjustment rules, payment terms, tax responsibilities (including TIN disclosure and backup withholding triggers), reconciliation and dispute procedures, and audit access. Properly executed, the agreement clarifies who issues invoices, how credit notes are handled, and the responsibilities for reporting to tax authorities. Electronic execution is permitted under the ESIGN Act (15 U.S.C. ch. 96, 2000) and state UETA rules.

Why a Self-Billing Agreement Matters for B2B Transactions

A Self-Billing Agreement reduces duplicate billing, speeds reconciliation, and centralizes tax reporting. It assigns invoice-issuance responsibility, documents required invoice content, and creates a clear record for audits and tax compliance under ESIGN/UETA frameworks.

Why a Self-Billing Agreement Matters for B2B Transactions

Who Typically Uses a Self-Billing Agreement

Buyers, suppliers, and accounts-payable teams commonly use Self-Billing Agreements to centralize invoicing, reduce administrative burden, and clarify tax responsibilities.

  • Buyers and large purchasers that issue invoices on suppliers’ behalf to simplify accounts-payable workflows and reduce vendor billing volume.
  • Suppliers that accept buyer-issued invoices to gain faster payment predictability and reduce supplier invoicing overhead and mismatches.
  • Finance, tax, and ERP teams responsible for tax reporting, 1099 reconciliation, and enforcing audit and retention policies.

Confirm which internal teams will own invoice templates, reconciliation, and dispute resolution, and ensure signatory authority is documented within the agreement.

Core Clauses Every Professional Self-Billing Agreement Should Include

A robust Self-Billing Agreement defines parties, invoicing mechanics, pricing, tax handling, reconciliation, audit rights, and termination provisions to reduce disputes and support tax compliance.

Parties

Identify buyer and supplier by full legal entity name, address, contact and authorized signatories; specify roles for invoice issuance and approval.

Scope

Describe the goods or services covered, excluded items, delivery and acceptance criteria, and the time period during which buyer may issue invoices.

Invoicing

Set invoice content requirements, numbering, currency, required supporting data, frequency, delivery method, and timing for issuance and dispute notification.

Pricing

State fixed prices or calculation methods, allowances, credits, and procedures for price adjustments and retrospective settlements.

Tax & Reporting

Require supplier TIN/W-9, allocate responsibility for sales tax and information returns, and include indemnities for tax misreporting or withholding failures.

Audit & Termination

Grant audit and reconciliation rights, set document retention periods, define notice and cure periods, and specify termination triggers and post-termination billing.

Step-by-Step: Complete and Execute the Self-Billing Agreement

Follow these steps to review, finalize, and execute a Self-Billing Agreement with clear invoicing and tax controls.

  • 01
    Review Terms: Confirm scope, pricing, and tax responsibilities are clearly stated.
  • 02
    Collect Tax Info: Obtain a completed W-9 and verify the supplier TIN.
  • 03
    Authorize Invoicing: Agree invoice format, supporting data, and approval workflow.
  • 04
    Sign and Distribute: Execute electronically and provide copies to accounting and tax teams.

Configuring an Online Workflow for Self-Billing

Configure your e-signature and accounting systems to automate invoice generation, approvals, and archival in line with the agreement.

Field Configuration
Invoice Source Buyer ERP feeds or automated PO/receipt data
Auto-generate Yes — generate invoices from approved transactions
Approval Threshold Set dollar thresholds requiring manual review
Authentication Email link, SMS OTP, or SSO for signer identity

Process Flow: From Agreement to Payment

A clear routing sequence reduces delays: sign the agreement, configure invoicing, issue buyer-generated invoices, and reconcile payments.

  • Upload Agreement: Store executed agreement in contract repository for reference
  • Configure System: Map invoice fields and set templates in your accounting system
  • Buyer Issues Invoices: Buyer generates invoices and sends copies to supplier
  • Reconcile & Pay: Supplier reconciles buyer invoices and invoices trigger payment

Technical Requirements for Digital Completion and Submission

Ensure your e-signature and accounting platforms support required integrations, document formats, audit trails, and secure signer authentication before implementing self-billing.

  • Integrations: Salesforce, NetSuite, Google Workspace, ERP connectors
  • Formats: PDF, PDF/A, Word DOCX supported
  • Authentication: Email, SMS OTP, SSO, optional KBA

Key Deadlines and Timing Considerations

Track issuance, tax reporting, and retention timelines to avoid penalties and ensure timely reconciliation under tax and contract rules.

Effective Date:

Agreement date governing when invoicing authority begins

Invoice Issue Deadline:

Invoices commonly issued per cycle, often within 30 days of period end

W-9 on Request:

Supplier must provide Form W-9 when requested; no filing deadline

Tax Reporting Dates:

Form 1099-NEC to recipients and IRS due Jan 31

Record Retention:

Retain invoices and support at least three years (IRC §6501(a))

Common Pitfalls to Avoid When Preparing a Self-Billing Agreement

  • Missing or incorrect TINs can trigger 24% backup withholding and IRS mismatch notices, causing payment holds and penalties if unresolved.
  • Unclear invoice content or numbering leads to reconciliation errors, duplicate payments, and increased manual corrections between buyer and supplier.
  • Inconsistent billing frequency, currencies, or cutoffs creates settlement disputes and delays in supplier payment processing.
  • Lack of documented audit access and retention rules hampers tax audits and can jeopardize deduction claims or compliance defenses.

Penalties and Risks from Incorrect or Incomplete Agreements

1099 Filing Penalties: $60–$330 per form; $660+ for intentional disregard
Backup Withholding: 24% withholding if TIN missing or incorrect
I-9 Violations: $281–$2,789 per violation
Contract Disputes: Payment withholding and litigation exposure
Tax Reporting Errors: Amendments, interest, and administrative penalties
Data Breach Risk: HIPAA/PCI fines for exposed PHI or cardholder data

Required Information, Data Security, and Compliance Notes

Supplier Name: Full legal entity name required
Tax ID: 9-digit EIN or SSN on Form W-9
Remittance Address: Street, city, state, and ZIP
Bank Account Details: Collect ACH info via secure channels
Encryption: TLS 1.2/1.3 in transit; AES-256 at rest
Certifications: SOC 2 Type II, ISO 27001, HIPAA (BAA required)

eSignature Vendor Comparison for Executing the Form Electronically

Overview of starter pricing and core plan features that matter when electronically executing a Self-Billing Agreement. Vendor columns list common plan baselines for comparison.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies by plan Varies by plan Varies by plan Varies by plan
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Practical Scenarios: How Organizations Use Self-Billing Agreements

Two concise scenarios that show common implementations and outcomes from self-billing arrangements.

Distributor Partnership

A national retailer authorized monthly consolidated invoicing on behalf of many small suppliers to streamline accounts-payable.

  • Monthly consolidated invoices issued to simplify payments and remittance.
  • Suppliers gained predictable payment dates, administrative workload fell, 1099 reconciliation was simplified, and duplicate billing disputes declined after automated reconciliation processes were implemented.

Service Agency

A marketing services buyer agreed to self-billing for recurring retainers to reduce supplier billing load and speed processing.

  • Automated invoices tied to approved time reports.
  • The agency reduced invoice queries, improved cash forecasting, and used audit trails to resolve occasional disputes quickly without impacting payments.

Frequently Asked Questions About Self-Billing Agreements

Practical answers to common legal, tax, and operational questions about using Self-Billing Agreements in U.S. commercial practice.


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