Definition
Invoice refers to Sales Invoice which is used by the seller to forward it to the purchaser. This is a non-negotiable instrument are used to record transactions which have been made on credit. Invoice are issued when goods or services are supplied but payment is not received at the time of transaction is made.
Sales Invoice
When a company supplied goods or renders services on credit to a customer, the company will send a sales invoice as a concrete evidence of the sales. The details of invoice should similar with the sales order. Actually, the invoice is the request to the customers for the payment against supplied goods or rendering services. Most of the cases sales invoice are numbered for the easy tracking of all the sales invoices it sends out.
Purchase Invoice
Purchase Invoice is the invoice which is received by the customer against their purchase made on credit. The details of the purchase invoice should match with the details of the purchase order. The details of purchase invoice will match with the details of sales invoice because it is the documents sent by the supplier. Most of the companies will give unique reference numbers to purchase invoices received so that they can be tracked within the business.
Contents of Invoice
The following information should contain on invoice :
- Invoice Number
- Name and address of the seller and purchaser
- The descriptions of product/services
- The quantity and unit price of the product
- Details of discount to be mentioned
- Total Invoice amount including VAT
- The probable payment date, and other terms of the sale
Conclusion
An invoice are usually related to sales or purchase order. This is considered as a source documents of credit transactions. Any invoice is primarily is a payment request, but has other purposes too. Since an invoice is using for different purposes, several copies should be retained by the company. The details of the invoice should match with the details of purchase order.