Definition of Invoice
An invoice is a commercial document recording sales transactions, product status (quantity and attribute), and the price of the order. These commercial documents should be time-stamped and issued by the sellers to the buyers.
Types of invoices
There are various types of invoices, some of those are:
Proforma invoice
This type of invoices record every purchased product and service along with the price for each. Proforma invoices are usually exported before the agreements between parties are done.
Interim invoices
These invoices can be used for large projects by breaking total payments into smaller pieces along with certain finished portions, which benefits both buyers and sellers.
Recurring invoices
Businesses automatically send recurring invoices to the same customers at regular intervals along with detailed information.
Final invoice
Final invoices are exported in the last payment of customers maybe along with the information about every payment made during a certain time period.
Collective invoice
Pricings of all different services or products purchased by a customer or even various transactions are included in one invoice.
What are invoices used for?
Booking keeping
Retailers use invoices to record every transaction which is always taken into account during the cash flow management process and revenue tracking.
Tax record
Sales invoices are used as a tool to confirm the information that businesses have listed on their annual tax reports.
Legal protection
Businesses also utilize invoices to prevent false lawsuits since every information about transactions such as date, time, products or services, the amount of money is entirely recorded.
Marketing
Retailers can make use of invoices to develop a proper marketing strategy, for example, by analyzing the time period that is most in demand or which products or services are most popular.
Tracking inventory
Via sales invoices, businesses can manage the quantity of inventory and forecast required inventory amounts in the future.
