AskDefine | Define invoice

Dictionary Definition

invoice n : an itemized statement of money owed for goods shipped or services rendered; "he paid his bill and left"; "send me an account of what I owe" [syn: bill, account] v : send an bill to; "She invoiced the company for her expenses"

User Contributed Dictionary

English

Noun

  1. a bill; a commercial document issued by a seller to a buyer indicating the products, quantities and agreed prices for products or services that the seller has already provided the buyer with. An invoice indicates that, unless paid in advance, payment is due by the buyer to the seller, according to the agreed terms.

Translations

bill

Verb

  1. to bill; to issue an invoice

Translations

to bill

Extensive Definition

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.
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).

Basic invoice

A typical invoice contains
  • The word "invoice"
  • A unique reference number (in case of correspondence about the invoice)
  • Date of the invoice
  • Name and contact details of the seller
  • Tax or company registration details of seller (if relevant)
  • Name and contact details of the buyer
  • Date that the product was sent or delivered
  • Purchase order number (or similar tracking numbers requested by the buyer to be mentioned on the invoice)
  • Description of the product(s)
  • Unit price(s) of the product(s) (if relevant)
  • Total amount charged (optionally with breakdown of taxes, if relevant)
  • Payment terms (including method of payment, date of payment, and details about charges late payment)
The US Defense Logistics Agency requires an employer identification number on invoices.
The European Union requires a VAT (value added tax) identification number on invoices between entities registered for VAT.

Variations

There are many different types of invoices:
  • Pro forma invoice - In foreign trade, a pro forma invoice is a document that states a commitment from the seller to provide specified goods to the buyer at specific prices. It is often used to declare value for customs. It is not a true invoice, because the seller does not record a pro forma invoice as an accounts receivable and the buyer does not record a pro forma invoice as an accounts payable. A pro forma invoice is not issued by the seller until the seller and buyer have agreed to the terms of the order. In few cases, pro forma invoice is issued for obtaining advance payments from buyer, either for start of production or for security of the goods produced.
  • Credit memo - If the buyer returns the product, the seller usually issues a credit memo for the same or lower amount than the invoice, and then refunds the money to the buyer, or the buyer can apply that credit memo to another invoice.
  • Commercial invoice - a customs declaration form used in international trade that describes the parties involved in the shipping transaction, the goods being transported, and the value of the goods. It is the primary document used by customs, and must meet specific customs requirements, such as the Harmonized System number and the country of manufacture. It is used to calculate tariffs.
  • Debit memo - When a company fails to pay or short-pays an invoice, it is common practice to issue a debit memo for the balance and any late fees owed. In function debit memos are identical to invoices.
  • Self-billing invoice - A self billing invoice is when the buyer issues the invoice to himself (e.g. according to the consumption levels he is taking out of a vendor managed inventory stock).
  • Evaluated receipt settlement (ERS) - ERS is a process of paying for goods and services from a packing slip rather than from a separate invoice document. The payee uses data in the packing slip to apply the payments. "In an ERS transaction, the supplier ships goods based upon an Advance Shipping Notice (ASN), and the purchaser, upon receipt, confirms the existence of a corresponding purchase order or contract, verifies the identity and quantity of the goods, and then pays the supplier."
  • Statement - A periodic customer statement includes opening balance, invoices, payments, credit memos, debit memos, and ending balance for the customer's account during a specified period. A monthly statement can be used as a summary invoice to request a single payment for accrued monthly charges.
  • Progress billing used to obtain partial payment on extended contracts, particularly in the construction industry (see Schedule of values)

Utility bills

Bills from utility companies are based on measured (metered) use of electricity, natural gas or other utilities at a residence or business. 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.

Electronic invoices

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 varies 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.
But the most common continues to be PDF over email.

EDIFACT

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. The "IFTMCS" standard is used to transmit freight invoices.

UBL

Use of the XML message format for electronic invoices has begun in recent years. There are two standards currently being used. One is the cross industry invoice issued by the United Nations standards body UNCEFACT and the other is part of the UBL (Universal Business Language) which is issued by [Oasis]http://www.oasis-open.org. Implementations of invoices based on UBL are more common, most importantly in the public sector in Denmark. Further implementations are under way in the Scandinavian countries as result of the NES (North European Subset) project http://www.nesubl.eu. The NES work is being transferred to [CEN]http://www.cen.eu (the standards body of the European Union) for public procurement in Europe. 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 2010 including the provision of an upgrade path for implementations started in either standard.

Payment for invoices

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.

References

invoice in Czech: Faktura
invoice in German: Rechnung
invoice in Spanish: Factura
invoice in Esperanto: Fakturo
invoice in French: Facture (comptabilité)
invoice in Italian: Fattura (documento)
invoice in Hebrew: חשבונית
invoice in Lithuanian: Sąskaita-faktūra
invoice in Hungarian: Számla (bizonylat)
invoice in Dutch: Factuur
invoice in Japanese: 送り状
invoice in Norwegian: Faktura
invoice in Polish: Faktura (dokument)
invoice in Portuguese: Fatura
invoice in Romanian: Factură
invoice in Russian: Инвойс
invoice in Slovak: Faktúra
invoice in Finnish: Lasku
invoice in Swedish: Faktura
invoice in Vietnamese: Hóa đơn
invoice in Ukrainian: Накладна
invoice in Chinese: 发票

Synonyms, Antonyms and Related Words

account, bill, bill of account, bill of fare, bill of lading, books, call, call in, carte, check, demand payment, dun, itemized bill, ledger, manifest, menu, reckoning, score, send a statement, statement, tab
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