Invoice Definition and Example
Invoice Definition – “A bill submitted to a purchaser for goods and services rendered”.
In accounting terms, Invoice is a voucher, that is the evidence of a transaction between buyer and seller done on credit. This document consists of the details about the transaction. These includes number of quantity purchased, price of each quantity, terms of the deal including discounts or rebates. In addition to this, it also provides the various methods of payment.
Invoice consists of a invoice number at the top of the document. Plus there is also mention of “invoice” word on the bill. It also consist of the information about the seller including his name and address of the seller. This is useful when some confusion or error happen in the transaction. There is mention of discounts, payments methods as well as final charges and late payments.
Invoice also consists of charges such as shipping, freight, handling and tax. The most important component of invoice is invoice date. It specifies the date of billing, credit due date and grace period. Usually the expiry date of an invoice is 30 days.
Related Financial Terms of Invoice
Element of Invoice
- Number of the invoice
- Name, address and phone number of seller.
- Address and name of buyer
- Date of delivery
- Description of the item purchased
- Quantities of the item
- Total cost as well as unit price of the item
- Any Sales tax
- Payment methods
- Payment terms
- Grand total