The invoice is a billing document under which a single transaction is invoiced and contains a detailed list of the goods and services purchased in that transaction. It is different from an account statement that lists all the invoices issued on behalf of a particular customer during a specified period.
Basically, each perfect invoice consists of the following elements: an invoice date, an invoice number, a detailed list of all goods and services purchased, sales taxes and shipping amounts (if applicable), the amount total owed, shipping address, etc. All of these elements are vital to preparing an invoice. From the buyer’s point of view it is a purchase invoice and from the seller’s point of view it is a sales invoice. Although the document indicates buyer and seller, it actually indicates the amount of money that is owed.
Each invoice typically contains the following items:
• Title “Invoice” (Australian tax invoice and includes GST).
• Unique reference number.
• Date of issuance of the invoice.
• Relevant tax payments, ie GST and VAT.
• Name, contact information and address of the seller.
• Details of the seller’s company registration (if applicable).
• Name, contact details and address of the buyer.
• Date on which the good or service was sold or delivered.
• Purchase order number (example: tracking numbers requested by the buyer)
• Description of the goods or services provided.
• Unit price of the good or service.
• Total amount owed or charged (with breakdown of relevant taxes).
• Payment terms (cash or credit card, including method and date of payment and details of any late payments).
• Any other terms and conditions.
There are different types of invoices such as credit note, debit note, commercial invoice, self-billing invoice, evaluated receipt settlement, timesheet, account statement, progressive billing, etc. Today sellers follow Online Billing under which all credentials are recorded on the computer and sent electronically to the customer’s computer. Thus, all billing is done over the Internet and payment is also received electronically.
VAT Details: If someone is registered for VAT purposes, be it a sole trader or a limited company, it is essential to include all relevant information related to sales on the invoice. Each individual sale results in a separate and unique invoice. Therefore, it is considered best to correctly establish VAT records and invoices every time a business is started. You can also prepare a pro forma invoice and send it to the buyer for confirmation of the terms of the contract under consideration. This is said to be a polite reminder for the buyer to realize that they must pay. You can also add any additional information, if it is very important.