Invoicing

Overview

A sale involves a transaction between a seller and buyer. In general, a sale involves goods, personal services, professional services, warehousing costs, and healthcare costs. Any time that a transaction occurs, a buyer can make a payment immediately, or a buyer can choose to follow up with additional payment at a later date.

An invoice, also known as a bill, lists the items and services purchased as well as the purchase price, tax, shipping, and labor charges. Typically, invoices will include a line item breakdown of all prices in addition to the total amount owed.

How it Works

An invoice is a tool that facilitates communication between the seller and buyer. The seller will send the buyer a document that lists the products purchased, number of items purchased, line item prices, shipping fees, labor charges, and total amount owed.

In general, the seller will send an invoice when the services or products have not been paid for up front. If the amount has not been paid in full, the seller may choose to specify a date by when buyers need to make payments. The invoice may also specify terms for a payment plan. The buyer will receive an invoice periodically until the balance is paid in full.

Some industries, such as the professional service or real estate industry will specify the time period for which you are billed.

Free Printable Invoice Templates

Free invoice templates are available for standard business needs. Your company can use these templates or use them as a model to create a new and unique one.

• Google docs: Several templates are available through Google docs online. There are templates for a service invoice, basic invoice, customized small business invoice, sales invoice, and advertisement invoice. Google docs will not make you sign up for a trial to use these services. With Google docs, it is possible to sort templates by number of users and reviews.
• Vertex42: If you need an Excel-based invoice for services, sales, and rent, you should visit this resource. These templates are available in Excel and PDF format, which is convenient for receipts and packing slips.
• Word Templates: This resource offers invoice templates in Microsoft Word format and allows the option of creating an hourly invoice form.

Benefits

An invoice provides a written and tangible record for both the buyer and seller. Both the buyer and seller are better equipped to stay organized.

With an invoice, buyers have the opportunity to dispute charges. It is not uncommon for charges to sometimes be incorrect as a result of error. By having an invoice, it is possible for the buyer and seller to back up payments owed, payments made, and payments received.

An invoice makes it possible for an agency or business to streamline its finances and earnings. A business is in a better position to pursue unmade payments through collections agencies or other means.

Costs

Invoicing costs depend on the nature of your business. If your business is large with many sales, the cost of producing, sending, and regulating invoices will be higher than a small business with few clients or customers.

A business with an extensive and automated database system may have a more efficient time processes invoices.

The mode of delivery can also influence invoice costs. E-mail invoices eliminate paper costs.

Timing

An invoice should be sent once all of the costs are finalized. In some situations, invoices should be sent to confirm that all payments have been made. Businesses should continue sending invoices on a monthly basis until all balances are paid in full. Invoices should be sent as quickly as possible. A buyer should receive an invoice within 30 days at the latest.