Invoice
Definition
A commercial document issued by a seller to a buyer detailing the products or services provided and the amount owed.
Overview
An invoice is a formal billing document that serves as a request for payment from a seller to a buyer. It includes essential information such as the invoice number, date, seller and buyer details, itemized list of goods or services, quantities, prices, taxes, and the total amount due. Invoices are crucial for business record-keeping, tax compliance, and cash flow management.
Example
A freelance web developer sends an invoice to a client for $2,500 after completing a website redesign project. The invoice includes hourly rates, total hours worked, and payment terms (Net 30).
Best Practices
Invoices should be sent promptly after delivering goods or services. Include clear payment terms, due dates, and accepted payment methods.
Common Mistakes to Avoid
Missing invoice numbers or dates
Unclear payment terms
Not including tax information
Forgetting to specify payment methods
Frequently Asked Questions
When should I send an invoice?
Send an invoice immediately after completing work or delivering products, or according to the payment schedule agreed upon in your contract.
What information must be on an invoice?
Essential information includes: unique invoice number, date, your business details, client details, itemized services/products, amounts, taxes, total due, and payment terms.