Invoice - What is invoicing?
An invoice is a document sent to a buyer that specifies the amount and cost of products or services that have been provided by a seller
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An invoice indicates what must be paid by the buyer according to the payment terms of the seller. Payment terms usually specify the period of time that a buyer has to send payment to the seller for the goods and/or services that they have purchased.
An invoice provides a detailed account of the products or service and a set of other information that can vary a bit depending on the requirements in the country the invoice is issued and the type of product or service being sold.
What an invoice should include
Usually, an invoice will include an the following points of information in order to be considered legal invoices:
- The word ‘Invoice’
- A unique reference number: the invoice number
- The date the product was sent or delivered (or the date the service was rendered)
- The date the invoice was sent
- The contact information and name of the seller
- The name and contact details of the buyer
- The terms of payment (that explain the means of payment, when the sum should be received, any cash discount details for early payment, late payment fees, etc.)
- A line detailing the product/service
- The cost per unit of the product (if this applies)
- The total amount that is owed
Invoicing in Debitoor
In Debitoor you can design, create, send and enter payment on your own invoices from your computer, smartphone, or tablet.
Our easy-to-use invoice templates make it simple to create professional-looking invoices in just a few clicks. Add your company logo and your own photos to customise your invoice and promote your unique brand.
Why invoicing is important
An invoice is a pillar of the sales process. It is the main document that serves as a bill for the service or products your business has provided. A properly created invoice is a legal document that provides a binding agreement.
Invoices are important not only for keeping track of sales and payments, from balances to stock levels, but they can also be used in the case that a payment is overdue or missing and is followed up with more formal actions. Read more about the steps to take in the case of late payment on your invoice in our blog: 'Not in it for the chase'.
Sales v. purchase invoice
An invoice shows the payment that a buyer owes to a seller. From a seller’s point of view, an invoice for the sale of goods and/or services is referred to as a sales invoice.
From a buyer’s point of view, an invoice for the cost of goods and/or services rendered is referred to as a purchase invoice.
Today, online invoice software makes it easy to create and send invoices. Cloud-based online software is available at any time, anywhere you have an internet connection and smartphone, tablet, or computer.
Good invoicing software provides invoice templates that adhere to the legal requirements as well as VAT for an invoice in the country in which your business is based, meaning that there are no concerns about whether you've included all the details your invoice needs.