Almost all of us have dealt with invoices in our day-to-day life. Even if we are not into any business. That is because we all buy things even if we don’t sell them. From local grocery shop to an online store, we get invoiced almost every day. As a buyer in a cash transaction, we don’t consider invoice anything more than a receipt of an expense or purchase but that’s not the case with business. For a business, an invoice is an important document. Whether it’s a sales invoice or a purchase invoice, it is equally important for a business. According to the studies, an invoice is the most commonly used commercial document. Keeping the importance of invoice, it is natural to have multiple questions in your mind about invoice. Let’s take a look at the top 5 invoice related questions.

Top 5 Invoice Related Questions

What is an invoice?

An invoice in its simplest meaning is a document (mostly commercial) that serves as a time-stamped record of a transaction between the buyer and the seller of some good(s) or service(s). Usually, the invoice is drawn by the seller or provider of goods and/or services upon the buyer/receiver of the same. In its basic form, the invoice contains the date of creation/transaction, buyer’s name, description, quantity, and amount of the goods/services. It can contain terms and conditions as well e.g payment terms, mode of payment, and/or any conditions governing the transaction.

What is the importance of an invoice?

An invoice is an important document. Even for an individual, an invoice acts as a record of a transaction/expense/income for record-keeping and reference. For a business, an invoice is a very important document. It is equally important for both buyer and seller. It becomes even more important if it contains some future date for the payment. For a business, it is important to keep an invoice for bookkeeping, tax filing, legal record, and financial analysis. An invoice sometimes acts as a delivery receipt, warranty certificate, or refund note as well.

What is the difference between invoice and bill?

People often use the words invoice and bill interchangeably. That’s not a correct approach. Though an invoice and a bill share some attributes, still there are differences between these two. An invoice is a more specific and elaborative document, whereas a bill is a more generic term used for multiple documents including invoices as well.  In some cases, the same document can be referred to as a bill or an invoice depending upon the side of the transaction. An invoice for the sender can be a bill for the receiver as they record it for payment. Invoices can be recurring and may have future payment dates but a bill is usually a statement of final or instantly due payment.  

What are the different types of invoices?

Invoices can be of different types depending upon multiple aspects. Usually, invoices are mainly classified into two major types regarding payment terms.

• Cash Invoice (Instant payment)

• Credit/Debit Invoice (deferred payment)

From the concerned parties’ point-of-view, invoices can be:

• Sales Invoice

• Purchase Invoice

Various other types of invoices may include but not limited to;

• Credit Invoice

• Debit Invoice

• Commercial Invoice

• Pro Forma Invoice

• Interim Invoice

• Final Invoice

• Past Due Invoice

• Recurring Invoice

• Manual Invoice

• e-Invoice

What is invoice processing?

Invoice processing is a term that refers to the whole process an invoice goes through within the organization. Invoice processing can be divided into some core steps:

• Creation/Recording of Invoice

• Verification of Invoice

• Approval of Invoice

• Payment of Invoice

Usually, invoice processing is referred to as the function of accounts payable. In a broader term, the complete dealing of an invoice within a business can be called invoice management. Invoice management may include invoice processing, invoice automation, invoice analytics, and invoice financing.

InvoiceMate is the next-generation invoice management system by MateSol that offers a complete blockchain-based solution for all your invoice-related requirements. InvoiceMate offers unparallel trust and efficiency throughout the invoice journey.

To learn about InvoiceMate or a demo of the product, please feel free to write at;

mate@invoicemate.net