Reviewed by Oct 05, 2020| Updated on
Invoices are commercial documents that will itemise and record transactions between a seller and a buyer. If the services or goods are bought on credit, then the invoice will specify the terms of the transaction and provides information on the payment methods available. Kinds of invoices can consist of the bill of sale, receipt, sales invoice, or a debit note.
Organisations can sometimes choose to merely send month-end statements as the invoice for every transaction that is outstanding. In this case, the statement will indicate that there would be no invoices sent out subsequently.
Previously, invoices were recorded formally on a piece of paper, generally with several copies being generated so that buyers and sellers have records of transactions for their records.
Now, computer-produced invoices are in use. These copies may be printed on a paper if the buyer demands or be sent via an email to all the parties involved in the transaction. The modern way of having invoices in the electronic form allows individuals and organisations to search and sort their invoices as per the volume of transaction, date, and other particulars.
The date of the invoice represents the date on which the goods or services were billed and records the transaction officially. Hence, the date of the invoice is very important information in billing and payment.
It will dictate the credit tenure and due date of the invoice. This is crucial, particularly for credit lending institutions. Typically, the due date to settle the invoice is thirty days post the date of the invoice.
An invoice will track the sale for the sake of control of the inventory, accounts, and taxation. There are companies that will ship the products and anticipate payments on a later date. This will result in the total due amount becoming account payable for buyers and account receivable for sellers.