Invoice -Definition, content and Examples

Introduction

Life is all about buying and selling. A society grows with buying and selling. As businessmen and women, record keeping is very necessary. It helps to the shows if the company is running loss or profit. The records can be kept in various ways. One of the ways is the use of an invoice. There are various types of invoice and they are peculiar to different businesses, companies and industries.

Definition

According to Oxford Dictionary, an invoice is a commercial document issued by a seller to a buyer indicating the products or services, quantities and agreed prices for products is service that the seller has already provided the buyer with. Simply, an invoice is a document received from a buyer by the seller. This document contains the quantities, prices of good and services provided by the buyer.

Content of an Invoice

An invoice contains the name and address of both the seller and the buyer, the date which the service was rendered, payment details, description and price of goods and services, date which the invoice was sent,and so on. The invoice is very vital in any business because it aids accountability. It helps the seller to request timely payment from clients. From the records kept, the business owner can forecast future sales.

Examples of Invoice

There are various types of invoice used in different businesses. There are Standard Invoice, Credit Invoice, Debit Invoice, Commercial Invoice, Time sheet Invoice, Expense Invoice, Interim Invoice, Past Due Invoice, Final Invoice and E- Invoice.

Standard Invoice: This Invoice is used by small businesses and it is the most commonest type of invoice used today. It contains the amount of money which a customer owes the business for its products and services.

Credit Invoice: As the name implies, the credit Invoice is given to a customer when a discount or refund or correction is made in the previous invoice. It is used to correct an error.

Debit Invoice: it is issued when goods bought or service rendered is under charged. Also, it is used to increase the amount a client owes the business.

Commercial Invoice: This invoice is used by businesses that run in the international level I.e to other countries of the world. This invoice contains the packaging format, description of goods, weight/ volume, shipment quality and total.

Time sheet Invoice: This invoice is mostly used in developed countries. It is used when a business is billing based on the hours they work and their standard rate of pay. It is mostly used by contract employees who are paid hourly. Agencies that use the timesheet Invoice are legal firms, business consultants, creative agencies, entertainers, etc.

Final Invoice: This is an invoice sent to a client when a project or service has been completed to the satisfaction of the client. This invoice is always detailed because it contains a list of services provided, total cost, invoice number, the due date for payment and payment method.

Past Due Invoice: This invoice is sent if a costumer does not pay for services rendered at the given date listed on the final invoice.

Interim Invoice: It is used for large projects where the client and the business owner have agreed to the terms that include multiple payment. If used in small businesses, it help manage cash flow while working on the project at a long period of time.

Expense Invoice: This invoice is used by the employer and the employees. An employee submit the expense invoice to the employer for refund of business related expenses.

Utility Invoice: According to Long man Dictionary, Utility is a service such as gas or electricity provided for people to use. People who render utility services use an invoice known as the utility invoice.

Such services are Power Holding Company of Nigeria, Nigeria Water Cooporations, Cable bills and Internet Usage. This Invoice is different from other types of Invoice because it contains the due date, amount of penalty payable after the due date, billing period and the previous amount paid or due.

E- Invoice: Any invoice sent using any electronic or online medium is called an E-Invoice. E- Invoice is becoming the most used invoice among big and small businesses. This is because it is quicker and easier to create and send. It helps you get paid faster for the goods sold or the services rendered.