Invoice
An invoice is a document that confirms the transaction between the buyer and the seller, reflecting the date and time. An invoice may indicate the terms and methods of payment if the goods or services were purchased on credit. An invoice is often used in international transactions, especially for import customs purposes.
An invoice can be provided in paper form (cheque, delivery note, debit note, sales invoice) and in electronic form.
The invoice always indicates that it is an invoice and the contact information of the seller and/or supplier of the good or service. It has a unique identification number, which can be used to recall information about the unit price of a good or service, the total number of purchased units, the cost of shipping, processing, delivery, tax charges, payment terms, discounts, prepayment, and other information.
Suppliers of goods or services may send a report of unpaid transactions for the month as an invoice. The invoice is usually provided in paper form in 2 copies - for the buyer and the seller. But nowadays invoices can be submitted electronically, which simplifies the search and sorting of transactions.
A pro forma invoice is a preliminary variant of an invoice indicating the purchased goods or services, cargo weight, transportation costs, and other information. It is sent to customers to coordinate the shipment or delivery of goods or services.
Invoice data
Invoice data should include the date and time when the transaction was recorded and the goods or services were invoiced. Also, payment information and the date of payment are required.
E-Invoicing
Nowadays, everyone uses electronic resources and it has become easier for businesses to invoice electronically. E-Invoicing is the creation, storage and management of transaction and condition documents.
Electronic documents include invoices, receipts, purchase order sheets, debit and credit notices, payment terms, payroll. Electronic invoices:
- are resistant to physical damage;
- are easy to search and sort by specific characteristics;
- are easier to audit;
- can be printed or reproduced if needed;
- are convenient for data collection and business intelligence;
- reduce the use of paper.
There are several electronic invoicing standards around the world to unify and ease understanding, thereby increasing efficiency and speed of processing and understanding.
Invoices and accounts payable
Invoices are needed to control and manage sales, inventory, bookkeeping, and tax payments. It helps to track accounts payable and liability. A buyer's accounts payable occurs when the contract is paid later, after shipment. It is the same as the seller's accounts receivable.
Invoices and internal controls
The accounting of any organization includes invoices. They are one of the most important elements of financial control. The responsible manager first needs to approve the expense on the invoice, check it against the purchase order, and approve payment after the transaction is made. The auditing firm makes sure that invoices are inputted in the appropriate accounting period when testing for expense cutoffs.
