What Is An Invoice?
An invoice is a commercial instrument given to the purchaser (buyer) by the product provider (seller). Usually it includes a reference number, the name of both the buyer and the seller, the date of the delivery of the product or the date when service was rendered, the payment method and terms, the product description and price, and the total amount charged. In other words, the invoice is a written document that verifies the agreement between the buyer and the seller of goods or services.
Invoice vs Other Types of Documents
Often an invoice is confused with some business documents. This can be a guide for you to identify the difference between invoices and these documents.
· Invoices vs Bills. The main difference between invoices and bills is their respective center of attention or focus. An invoice is produced by the provider or supplier. It is a document created to state the products or services produced that will be delivered or was delivered to the customer. It can be issued before or after the customer receives the product. It can also be included with the product itself as the product is delivered, for the customer to be able to verify each item. It is focused upon the transaction between the buyer and the seller.
A bill, on the other hand is a document requesting for payment and is on the customer’s standpoint. It is usual to receive a bill and not an invoice. It is presented when there is money owed.
· Invoices vs Purchase Orders. The main difference between invoices and purchase orders (POs) is that invoices happen after the transaction, while POs happen before the transaction.
· Invoices vs Receipts. In surface, both words are interchangeable. They may have similarities, but they are much different from each other in reality. Receipts are written documents that acknowledge that the payment for the services/products has been received. It is used as proof of payment, unlike the invoice which is issued before payment is made (meaning, payment is not yet made).
How Do You Invoice?
Here are ways to help you make a good invoice:
· Identify the customer.
· Include the purchase order/s as well as previous document numbers.
· Identify the products or services sold. One line for each product
· Include information about the deposits made by the customer or discounts availed, if ever they are any.
· Finally, include shipping terms and terms of sale.
Find yourself having a hard time producing an invoice? Don’t worry. There is this invoice template that can help you make them in no time!
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