Key Takeaways
- Orderly invoice management comes down to four things: a document for every transaction, a receipt for every payment you receive, tracking what has been paid and what is still open, and keeping the documents for as long as the law requires.
- Only an Osek Murshe (licensed dealer) may issue a tax invoice. An Osek Patur (exempt dealer) does not charge VAT and records its income mainly with receipts.
- Invoices, receipts and other business records are kept for 7 years from the end of the tax year, or 6 years from filing that year's annual report, whichever is later.
- An issued invoice may never be deleted; a mistake in it is fixed with a further document, usually a credit note (credit invoice).
- On every Keep plan you can issue invoices and receipts without limit as PDFs, see the status of each document and payment, and see which customers still owe you money.
Why Proper Invoice Management Matters
Invoice management is an integral part of any business's financial operations. Invoices are not just formal documents for tax reporting - they serve as a central tool for managing cash flow, tracking income and expenses, and maintaining organized financial records.
Healthy Cash Flow
Keeping invoices organized allows you to know exactly when money comes in and when future payments are expected. When invoices are issued on time and managed properly, you can prevent collection delays, minimize cash flow gaps, and avoid unpleasant surprises.
Legal Compliance
The Israel Tax Authority requires every business to document its transactions, issue a receipt for every payment it receives, and keep these documents for 7 years from the end of the tax year, or 6 years from filing that year's annual report, whichever is later. Errors or disorganization can lead to fines, unexpected audits, and delays in dealings with the authorities.
The document you issue depends on how you are registered for VAT: as an Osek Murshe or an Osek Patur. An Osek Murshe issues a transaction invoice or a tax invoice, and must issue a tax invoice when the customer asks for one. An Osek Patur may not issue a tax invoice, and under section 50 of the VAT Law anyone who issues one without being entitled to do so owes double the VAT shown on it. So a business customer who asks an Osek Patur for a tax invoice gets a regular receipt, with no VAT line.
Time Savings and Efficiency
If you are still issuing invoices manually or tracking them by hand, you are probably wasting valuable time. An invoice management system can do part of the work for you automatically, such as issuing the documents and calculating the totals.
Better Business Control
When all your financial data is organized and accessible in one place, making business decisions becomes much simpler. You can identify income trends, understand which customers pay on time and which are delayed, and plan future expenses accordingly.
Common Challenges in Invoice Management
Many business owners encounter daily challenges in managing their invoices. Without an organized system, management becomes a complex and time-consuming task.
Invoices Not Sent on Time
Many business owners are busy with managing the business, serving customers, and marketing, so they sometimes send invoices late or forget to send them entirely. The result? Payment delays, cash flow gaps, and financial pressure.
Lost Documents and Disorganized Archives
When invoices are stored manually, in scattered files, or in unsynchronized emails, finding an old invoice can become an exhausting task. Loss of critical documents can lead to non-compliance with Tax Authority requirements and collection difficulties.
Difficulty Tracking Payments
One of the most common problems is lack of organized tracking of which invoices have been paid and which remain open. Without a convenient system, businesses may miss payments and find themselves chasing open debts.
Errors in Invoices
Invoices containing number errors, incorrect VAT calculations, or inaccurate customer details can lead to awkward situations with customers, collection delays, and even problems with the tax authorities.
An issued invoice is never deleted, and no number in the sequence is skipped. The mistake is corrected with a credit note that states the number and date of the original invoice and the reason for the change, or with a correction on the next invoice to the same customer. Registered invoicing software does not let you delete an issued document, so both the original and the correction stay on record.
Smart Invoice Management with Keep
Keep has developed an invoice management system that simplifies the day-to-day work, allowing you to focus on growing your business instead of dealing with bureaucracy.
Automatic Invoice Generation
Instead of filling out each invoice manually, Keep's system generates invoices automatically. The system calculates the invoice totals for you, so you do not have to work them out by hand. You can generate receipts and transaction invoices without limit, and an Osek Murshe can also generate tax invoices with automatic VAT calculation.
Send Invoices Directly from the System
Instead of downloading files and sending them manually, with Keep the invoice is produced as a PDF and sent to the customer, and you can send a payment request alongside it with a link to pay by card or Bit. Every document you issue is saved in the system.
Smart Payment Tracking
Payment tracking becomes simple and efficient with Keep. You can see the status of each document and whether it has been paid. The system also shows which customers still owe you money, so it is easy to know who to follow up with.
All Invoices Stored in One Place
No more need to keep binders of the invoices you issued or search for them in scattered files. Every invoice you issue in Keep is saved in the system, and you can reach it from your computer or the mobile app.
Every Keep plan, even the basic one, includes unlimited invoices and receipts, payment requests with a link to pay by card or Bit, and a view of which customers still owe you money. The recommended plan adds a personal accountant for professional guidance and representation before the tax authorities, and business expense upload with one click, from a photo or a file.
Getting Started
Switching to digital invoice management is easy and simple. With Keep, no technical knowledge or complicated installations are needed. Here is how to get started:
- Registration - Sign up for Keep online and complete the verification steps the system asks for. The first month is on us, with no commitment.
- Initial setup - Enter your customers' details and set up automatic document issuing if it suits your business.
- Start working - Generate digital invoices, send them directly to customers, and track the status of every payment.
You can issue your first document only once your VAT file is open, and the law requires you to open it no later than the day the business starts operating. If you have not opened a file yet, you can open it through Keep for a one-time fee of 99 NIS + VAT and then issue your documents in the same system.
Summary
Proper invoice management is critical for every business - it maintains cash flow, prevents regulatory issues, saves time, and helps you manage your business smarter and more profitably.
A fixed routine keeps things in order: issue each document close to the transaction, go over the open payments once a week, and check once a month that every payment that reached your bank account has a receipt. That way your reports to the authorities rest on records that are already in order, rather than on paperwork pulled together at the last minute.
With Keep, you can generate, send, and track your invoices easily - everything in one place, without paperwork and without headaches.
Frequently Asked Questions About Invoice Management
What is the difference between a tax invoice, a transaction invoice and a receipt?
A tax invoice records a transaction and shows the VAT separately, and only an Osek Murshe may issue one. A transaction invoice is a payment demand you can send before the customer pays, and the customer cannot deduct VAT on the strength of it. A receipt confirms that a payment was received, and every business issues one for every payment.
How long do I need to keep invoices and receipts?
The period is 7 years from the end of the tax year, or 6 years from filing that year's annual report, and the later of the two applies. A document issued as a digital file in the first place does not need to be printed. Paper documents you receive, such as expense invoices, may be kept as scans only under the conditions the Tax Authority sets, and the originals may be destroyed only after that year's annual report has been filed.
What is an allocation number and when do I need one?
An allocation number is a number the Tax Authority issues for a tax invoice under the Israel Invoices model. As of October 2026, it is required on a tax invoice to another business when the amount before VAT is above 5,000 NIS (the threshold dropped to this level in June 2026), and without it the customer cannot deduct the VAT on the invoice and, for expenses since August 2025, cannot deduct the expense for income tax either. The requirement applies to Osek Murshe businesses and companies, not to an Osek Patur.
What can I do when a business customer pays late?
First check when the payment was due. Under the Payment Terms to Suppliers Law (2017), a business must generally pay a supplier no later than 45 days after the end of the month in which it received the invoice (known in Israel as shotef + 45), unless the contract sets a different date in a way the law allows. In some cases the law also entitles the supplier to interest and late-payment charges. It helps to state the agreed payment date on the invoice, so it is clear when the payment becomes late.
