An invoice is a document issued by a seller to the buyer that indicates the quantities and costs of the products or services provider by the seller. An invoice specifies what a buyer must pay the seller according to the seller’s payment terms. Payment terms indicate the maximum amount of time that a buyer has to pay for the goods and/or services that they have purchased from the seller. An invoice indicates that a buyer owes money to a seller. Therefore, from a seller’s point of view, an invoice for the sale of goods and/or service is called a sales invoice. From a buyer’s point of view, an invoice for the cost of goods and/or services rendered is called a purchase invoice. An invoice is a record of a sale or shipment made by a vendor to a customer that typically lists the customer’s name, items sold or shipped, sales price, and terms of the sale. In other words, it’s an itemized statement the reports the details of a sale for the buyer and seller’s records
TYPE OF AN INVOICE:
The different types of invoices that businesses can raise on their clients or customers.
A standard invoice is the most common form of invoice used mainly by small businesses and flexible to fit in most industries and billing cycles.
Next on the list is credit notes and debit notes. It is also known by names such as credit memo and debit memo. Credit and debit notes are used for decreasing value and increasing values of previously raised invoices, respectively.
For instance, credit notes are used while the business wants to pass on a discount or provide a refund to its customers or buyers. On the other hand, debit notes are used to increase the quantity or value of the original invoice.
Another type of invoice is the pro forma invoice. A pro forma invoice is an estimation that a company sends to a customer before delivering services. A pro forma invoice gives the client an estimation of the cost of the work that needs to be done. When a project is completed, pro forma invoices need to be adjusted to represent the hours worked accurately.
A commercial invoice is a document provided by a company for products it sells to consumers worldwide. Commercial invoices provide information about the sale that is required to calculate customs duties for cross-border transactions.
A timesheet is an invoice used when a company or employee bills depending on the number of hours they work and their hourly rate of pay. Contract workers who are paid hourly by their contractor use timesheets.
There are other types of the invoice such as expense report, interim invoice, final invoice, past due invoice, recurring invoice and e-invoice.
