A professional invoice is more than just a payment request -- it is a legal document that protects both you and your client. In Kenya, invoices must meet specific requirements set by the Kenya Revenue Authority (KRA) to be considered valid for tax purposes. Getting your invoicing right from the start helps you avoid compliance issues and ensures you get paid on time.
Mandatory Fields on a Kenyan Invoice
KRA requires every tax invoice to contain specific information. Missing any of these fields can render your invoice invalid for VAT claims, which could cost your clients money and damage your professional reputation. Below is a complete list of what every Kenyan invoice must include.
| Field | Description | Example |
|---|---|---|
| Invoice Number | Unique sequential number for tracking | INV-2025-0042 |
| Invoice Date | Date the invoice was issued | 15 January 2025 |
| Seller KRA PIN | Your business tax identification number | P051XXXXXX |
| Buyer KRA PIN | Client tax identification number (for B2B) | A00XXXXXXX |
| Business Name & Address | Full legal name and physical address | Acme Ltd, Westlands, Nairobi |
| Description of Goods/Services | Clear itemized breakdown | Web Development -- 40 hours |
| Total Amount | Sum before and after tax | KES 100,000 + VAT |
| VAT Amount | 16% VAT shown separately (if VAT registered) | KES 16,000 |
VAT Requirements for Kenyan Invoices
If your business is VAT-registered (annual turnover exceeding KES 5 million), you are legally required to charge 16% VAT on taxable supplies. Your invoice must clearly show the VAT amount as a separate line item. Businesses that are not VAT-registered should not charge VAT and should indicate this on their invoices.
Important: If you are VAT-registered, your KRA PIN must appear on every invoice. Failure to include it can result in penalties of up to KES 100,000 per offence under the Tax Procedures Act.
Formatting Tips for Professional Invoices
- Place your company logo and contact details prominently at the top of the invoice.
- Use a consistent numbering system (e.g., INV-YYYY-NNNN) to make tracking and auditing easier.
- Itemize every product or service with quantity, unit price, and line total for full transparency.
- Include your payment terms (Net 14, Net 30) and accepted payment methods such as M-Pesa, bank transfer, or cheque.
- Add your bank account details or M-Pesa Paybill/Till number directly on the invoice to reduce payment friction.
- State your currency clearly -- use KES for local transactions and specify the exchange rate for foreign currency invoices.
Common Invoice Mistakes to Avoid
Many Kenyan businesses lose money or face compliance issues due to avoidable invoicing errors. Sending invoices without a KRA PIN, using inconsistent numbering, or failing to separate VAT from the base amount are among the most frequent mistakes. Always double-check your invoices before sending, and consider using invoicing software to automate the process and reduce human error.
- 1Forgetting to include your KRA PIN or your client's PIN on B2B invoices.
- 2Not separating VAT from the subtotal, which makes it impossible for clients to claim input VAT.
- 3Using duplicate or out-of-sequence invoice numbers, which raises red flags during KRA audits.
- 4Failing to specify payment terms, leaving clients unsure of when payment is due.
- 5Omitting a clear description of services rendered, which can lead to payment disputes.
Automate Your Invoicing Process
Manual invoicing is time-consuming and error-prone. Modern invoicing software can auto-populate your KRA PIN, calculate VAT, generate sequential invoice numbers, and send invoices directly to your clients. Automation frees up your time so you can focus on growing your business instead of chasing paperwork.
