Tax Category Tax: calculations, VAT, self-employment tips and more

What to put on an invoice

If you are providing products to a customer or services to a client, you will need to generate a form known as an invoice. This form will help you keep track of deliverables as well as payments received.

Significance

An invoice (whether hard copy or electronic) is the key to all accounting processes in a business.

Function

An invoice is a contract that serves to confirm that goods have been purchased, whether or not delivery has yet been made (thus protecting both the business and the customer).

Types

There are two basic types of invoices: One is for a line-item purchase order for a specific product or service, and the other is for a blanket order (or standing order) for goods or services to be delivered over a specified time.

Features

A basic invoice includes the terms and conditions of the sale: date, price, quantity, description and terms of payment.

Considerations

To protect your company from a protracted (and costly) collection process, spell out the penalties (including collection agency and attorney fees) for failure to remit payment by the date indicated.

Fun Fact

Invoices from the turn of the century were much more elaborate and ornate than the staid business forms of today.

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