By Kelly Kemp - March 26 2018 22:58:31
Invoices are sometimes confused with purchase orders. Purchase orders (POs) are before the transaction, and invoices are after the transaction. Purchase orders record an order by a customer to a vendor or supplier.
But that invoice is often needed by the buyer for other reasons. They need that record. They need to prove that they paid you, often so they can write off your payment. In my years of writing, I have only had one client, a magazine, that did not need an invoice. I am not sure why or how they managed that.
The usual sections in an invoice include:
~ The date that the invoice was created. Do not forget this! The date of the invoice starts the clock ticking on the customer. If you have terms (a time limit for payment), you want to include the date so everyone knows when the payment is due.
~ Names and addresses of customer and supplier. If you are creating the invoice in accounting software, you may only need the email address of the customer, but it is still a good idea to collect and include the physical address, in case you need to send a real letter or document.
~ Contact names of individuals at the two businesses (or business and individual). It is a good customer relations rule to make sure you spell names correctly.
~ Description of items purchased, either products or services, including prices and quantities. Often you will have standard item descriptions and inventory numbers. But be as specific and detailed as possible, when you create the invoice. This avoids confusion and "I did not know" issues.
~ Terms of payment. For example, the provider might specify "net 30 days," which means that the entire amount is due within 30 days.
You may be using online business accounting software, or maybe you are using a pre-printed invoice that you will complete. The process works the same way for both invoicing processes. You will prepare an invoice only after you have shipped or delivered the product or service to the customer.
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