By Reyna Chung - March 14 2018 03:15:05
An invoice serves several purposes. It is not just the catalyst that gets you paid, although I would venture to say that is the no 1 role, huh?
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.
Invoices may be mailed or emailed or faxed to a customer. When a customer pays, the invoice number should be noted on the sales receipt and matched to the sales receipt in your accounting software, so it is clear that the invoice has been paid. The payment takes the outstanding amount out of your accounts receivable account.
In the original article that I wrote about invoices, I stated that I just stick with a Word document. If I have time, I will change it to PDF, but that does not always happen. Another common practice that I have seen is using an Excel spreadsheet to generate the invoice. But one important consideration that I did not mention back then is the plethora of accounting software out there. Due to affordable small business-targeted options such as Freshbooks or Quickbooks, you may never have to generate an invoice yourself anyway. I have heard wonderful things about these applications, but have yet to check them out.
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