what is an invoice 
an invoice is a time stamped commercial document that itemizes and records a transaction between a buyer and a seller if goods or services were purchased on credit the invoice usually specifies the terms of the deal and provides information on the available payment methods types of invoices may include a paper receipt a bill of sale a debit note a sales invoice or an online electronic record investopedia nez riazthe basics of an invoicean invoice must state it is an invoice on the face of the bill it typically has a unique identifier called the invoice number which is useful for internal and external reference an invoice typically contains contact information for the seller or service provider in case there is an error relating to the billing payment terms may be outlined on the invoice as well as the information relating to any discounts early payment details or finance charges assessed for late payments it also presents the unit cost of an item total units purchased freight handling shipping and associated tax charges and it outlines the full amount owed companies may opt to send a month end statement as the invoice for all outstanding transactions if this is the case the statement must indicate that no subsequent invoices will be sent historically invoices have been recorded on paper often with multiple copies generated so the buyer and seller each have a transaction record currently computer generated invoices are quite common they can be printed on demand or sent by email to each party electronic records also allow you to search and sort transactions easier by number date goods or client a pro forma invoice is a preliminary bill of sale sent to buyers in advance of a shipment or delivery of goods the invoice will typically describe the purchased items and other important information such as the shipping weight and transport charges pro forma invoices often come into play with international transactions especially for customs purposes on imports a pro forma invoice is a binding agreement although the terms of sale are subject to change the invoice date represents the time stamped time and date on which the goods have been billed and the transaction officially recorded therefore the invoice date has essential payment information as it dictates the bill s credit duration and due date this is especially crucial for entities offering credit such as net 30 which means payment is due in 30 days likewise companies that offer customers the option to return items typically have a deadline based on a specific number of days from proof of purchase as indicated on the invoice since the advent of the computer era people and businesses have found it easier to rely on electronic invoicing as an alternative to paper documents electronic invoicing or e invoicing is a form of electronic billing that generates stores and monitors transaction related documents between parties and ensures the terms of their agreements are fulfilled these e documents may include invoices and receipts purchase orders debit and credit notes payment terms and instructions and remittance slips digital invoices are typically sent via email web page or app advantages include the following e invoicing includes several technologies and entry options and is used as a general term to describe any method by which an invoice is electronically presented to a customer for payment several e invoicing standards such as edifact and ubl have been developed around to world to facilitate adoption and efficiency 1invoices and accounts payableinvoices track the sale of a product for inventory control accounting and tax purposes which help track accounts payable and similar obligations due many companies ship the product and expect payment later so the total amount due becomes an account payable for the buyer and an account receivable for the seller modern day invoices are transmitted electronically rather than paper based if an invoice is lost the buyer may request a copy from the seller the use of an invoice represents the presence of credit as the seller has sent a product or provided a service without receiving cash upfront invoices differ from purchase orders created before a customer orders a good or service invoices and internal controlsinvoices are a critical element of accounting internal controls charges on an invoice must be approved by the responsible management personnel alternatively an invoice is matched to a purchase order and upon reconciling the information payment is made for approved transactions an auditing firm ensures invoices are entered into the appropriate accounting period when testing for expense cutoff 