Entrepreneurs deal with dozens of business documents each day. The paperwork, even though it might be digital, can be overwhelming. Understanding the invoice will help you in your business for years to come. You’ll most likely receive invoices from your vendors, but more importantly, you’ll send invoices to your customers to tell them what they owe.
What Is the Invoice?
An invoice is a document that communicates to the buyer what items have been purchased, the price of the items and how many have been purchased. It’s a signal to the buyer what must be paid. Although an invoice isn’t really a legal document, because then vendors could just create invoices and send them to anyone, once it’s agreed to by the vendor and customer, it is a legal debt.
Creating invoices that have consistent and complete elements will save you time, stress and money. Here are the things go on the invoice:
- The date you created the invoice. You may also want to include the date that the items were purchased, if different.
- Your business name, address and contact information.
- The customer’s name, address and contact information of the person who approved the purchase.
- A description of what was purchased, including quantity and price.
- Due date of the invoice, i.e. when is a payment due.
- An invoice number that helps you and the customer track invoices.
Sending an incomplete invoice can give the customer room to argue over the payment or to say that they didn’t see the dates. Some customers may simply refuse to pay if the invoice doesn’t appear complete.
Follow Up On Invoices
Invoices are the lifeblood for your business. They keep the money coming in. Many bookkeeping programs have invoices built into the software, or you can find a template online. Make sure to contact the company when invoices aren’t paid on time.
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