What is an Invoice: Complete Guide

An invoice is a bill from a business that lists items or services sold and their prices. Every invoice includes the seller information, customer details, invoice number, and payment terms. Businesses use invoices to request payment and track sales.

What Does an Invoice Look Like

A standard invoice shows the business name, address, customer information, and invoice number at the top. Below that you will find an itemized invoice list with prices for each item or service. The invoice price includes subtotals and any taxes or fees. Many businesses add their payment terms and due date at the bottom.

Types of Invoices

There are several types of invoices for different business needs. A commercial invoice is used for international sales. A sales invoice is common for regular business transactions. Contractor invoices help freelancers bill their clients. Some businesses also use PayPal invoices which include PayPal invoice fees for online payments.

Invoice Templates and Tools

You can create invoices using free templates. Google Docs invoice templates and Google Sheets invoice templates work well for basic needs. Free invoice template Word documents are good for offline use. Many businesses use invoice automation tools to save time with billing.

Invoice Management Systems

Invoice management systems help track open invoices and payments. These tools handle invoice processing and make it easy to send invoices. Some systems include invoice financing options where you can get paid early for a fee. Invoice discounting is another way to get money from unpaid invoices.

Invoice vs Receipt

An invoice asks for payment while a receipt confirms payment was made. You send an invoice when you want to get paid. The customer gets a receipt after they pay the invoice bill. Many invoice management systems create both documents automatically.

How to Create an Invoice

To make an invoice you need to include your business details, customer information, and an invoice number. List all items or services with their prices. Add up the total and include any taxes. You can send invoices by email or mail. Many people use Google invoice templates or invoice automation tools to make the process easier.