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There are many times of invoices, which invoice you will use depends on your industry or the purpose of your invoice. In this article, we talk about what is an invoice and the 6 different types of invoices that you can use. Strap in and let’s get going!
What is an invoice?
An invoice is a document sent by a seller to a buyer. In other words, to receive payment from customers, a business must send an invoice. An invoice should summarize the goods and services purchased, notify the buyer of the amount due and help a business get paid. It is very simple to create, you can send a professional invoice today with our step-by-step guide on what to include in an invoice.
The types of invoices:
Different industries may use invoices differently. For example, an F&B business may use re-occurring invoices, while a construction business uses a down payment invoice. The types of invoices depend on:
- How the products or services are fulfilled
- The frequency of occurrence
1. Standard Sales Invoice
A standard sales invoice is used to note a sale for products or services.
2. Proforma Invoice
A proforma invoice is sent to a customer in advanced of a sale to request payment. Usually, this could be when you need to formally agree on payment before delivering your goods or services. Normally, this would not hit your accounts until it is copied to a standard sales invoice.
3. Reserve Invoice
This is where you bill customers in advance of dispatching your products.
4. Down Payment Invoice
This is where you want your customer to pay a percentage of an agreed order or contract.
5. Re-occurring Invoice
This, as it suggests, is an invoice that repeats every week, month, quarter or year.
6. Purchase Invoice
This is the invoice you receive when buying. Basically, there are 2 types of purchase invoices:
- Goods for resale: products or services you resell to your customers.
- Goods not for resale: the costs associated with running your business.
Getting the most out of invoices
So, now that we have defined the different types of invoices, let’s look at the magic behind them. All invoices by their nature have a customer or supplier, a date and an amount. This is the very minimum that defines an invoice. To scale your business, there are ways to set up behind an invoice that will give you more value. Invoices can do so much more if they are integrated with your other business process, for example:
- Sales: Tells you which person in your business sold the item; by adding them together you can track sales performance
- Delivery: Lets you track multiple delivery addresses
- Finance: Tells you how much it is in a different currency
- Stock: Once a sale is complete, it automatically depletes or increases your stock
- Profit: Shows you the margin you made on each transaction
The more information you have within an invoice the more information you will get out… obviously :)
Therefore, grow your business by integrating invoicing with your sales, delivery and finance departments today.