An invoice or bill is a commercial document issued by a seller to the buyer, indicating the products, quantities, and agreed prices for products or services the seller has provided the buyer. An invoice indicates the buyer must pay the seller, according to the payment terms. The buyer has a maximum amount of days to pay for these goods and is sometimes offered a discount if paid before the due date.
In the rental industry, an invoice must include a specific reference to the duration of the time being billed, so rather than quantity, price and discount the invoicing amount is based on quantity, price, discount and duration. Generally speaking each line of a rental invoice will refer to the actual hours, days, weeks, months, etc. being billed.
From the point of view of a seller, an invoice is a sales invoice. From the point of view of a buyer, an invoice is a purchase invoice. The document indicates the buyer and seller, but the term invoice indicates money is owed or owing. In English, the context of the term invoice is usually used to clarify its meaning, such as "We sent them an invoice" (they owe us money) or "We received an invoice from them" (we owe them money).
Contents |
| I N V O I C E Company Name 123 Fake Street Springfield |
|||||
|---|---|---|---|---|---|
| Invoice No |
Date |
Terms | |||
| Description | Amount Owed: | ||||
| Invoice Total | $ | ||||
A typical invoice contains[1][2]
In countries where wire transfer is the preferred method of settling debts the printed bill will contain the bank account number of the debtor and usually a reference code to be passed along the transaction identifying the payer.
The US Defense Logistics Agency requires an employer identification number on invoices.[3]
The European Union requires a VAT (value added tax) identification number.
Recommendation about invoices used in international trade is also provided by the UNECE Committee on Trade, which involves more detailed description of logistics aspect of merchandise and therefore may be convenient for international logistics and customs procedures.[4]
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There are different types of invoices:
Bills from utility companies are based on measured (metered) use of electricity, natural gas or other utilities at a residence or business.[9][10] When an individual or business applies for service from the utility (opens an account), he signs an agreement (contract) to pay for his metered use of the utility.
Some invoices are no longer paper-based, but rather transmitted electronically over the Internet. It is still common for electronic remittance or invoicing to be printed in order to maintain paper records. Standards for electronic invoicing vary widely from country to country. Electronic Data Interchange (EDI) standards such as the United Nation's EDIFACT standard include message encoding guidelines for electronic invoices.
The United Nations standard for electronic invoices ("INVOIC") includes standard codes for transmitting header information (common to the entire invoice) and codes for transmitting details for each of the line items (products or services). The "INVOIC" standard can also be used to transmit credit and debit memos.[11] The "IFTMCS" standard is used to transmit freight invoices.[12]
In the European Union legislation was passed in 2010 in the form of directive 2010/45/EU to facilitate the growth of Electronic Invoicing across all its member states. This legislation caters for varying VAT and inter-country invoicing requirements within the EU, in addition to legislating for the authenticity and integrity of invoices being sent electronically. It is estimated that in 2011 alone roughly 5 million EU businesses will send Electronic Invoices. [13]
The XML message format for electronic invoices has been used since the inception of XML in 1998. OAGIS has included an invoice since 2001. OAGi has a working relationship with UN/CEFACT where OAGi and its members participate in defining many of the Technology and Methodology specifications. OAGi also includes support for these Technology and Methodology specifications within OAGIS.
The XML message format for electronic invoices has been used in recent years. There are two standards currently being developed. One is the cross industry invoice under development by the United Nations standards body UNCEFACT and the other is UBL (Universal Business Language) which is issued by [Oasis]http://www.oasis-open.org. Implementations of invoices based on UBL are common, most importantly in the public sector in Denmark as it was the first country where UBL is mandated by law for all the invoices of the public sector. Further implementations are under way in the Scandinavian countries as result of the NES (North European Subset) project http://www.nesubl.eu. Implementations are also underway in Italy, Spain, the Netherlands (UBL 2.0) and with the European Commission itself.
The NES work has been transferred to [CEN]http://www.cen.eu, (the standards body of the European Union) workshop CEN/BII, for public procurement in Europe. The result of that work is a pre-condition for PEPPOL, pan European pilots for public procurement, financed by the European commission. There UBL procurement documents will be implemented in cross border pilots between European countries.
Agreement has been made between UBL and UN/CEFACT for convergence of the two XML messages standards with the objective of merging the two standards into one before end of 2009 including the provision of an upgrade path for implementations started in either standard.
ISDOC is a standard that was developed in the Czech Republic as a universal format for electronic invoices. On 16 October 2008, 14 companies and the Czech government signed a declaration to use this format within one year in their products. The main page for the format providing specifications and examples of digitally signed invoices (also invoices with attachments) is here: http://www.isdoc.org .
Organizations purchasing goods and services usually have a process in place for approving payment on the invoice based on an employee's confirmation that the goods or services have been received.[14][15][16][17] Typically, when paying an invoice, a remittance advice will be sent to the supplier to inform them their invoice has been paid.
Invoices are different from receipts. Both Invoices and receipts are ways of tracking purchases of goods and services. In general the content of the invoices can be similar to that of receipts including tracking the amount of the sale, calculating sales tax owed and calculating any discounts applied to the purchase.[18] Invoices differ from receipts in that invoices serve to notify customers of payments owed, whereas receipts serve as proof of completed payment.[19]