What is an invoice?
Invoices are commercial documents issued to a buyer by a seller. The invoice could be for products, goods, or services. Primary invoices are used for a couple of different purposes. The first purpose of an invoice is to be paid by a buyer. The second purpose of an invoice can be used for tax purposes in combination with a receipt or proof of payment as a business expense.
Should invoices be retained?
Invoices are usually stored for a specific period of time, depending on the type of business and reason for storing the invoice records. This range of time is usually 3 to 7 years but could vary based upon individual regulatory or tax purposes.
While retaining original invoices is sometimes required, it’s a good business practice to store images and/or scans of your images on an online file share on Azure or storage location such as Microsoft SharePoint. Services such as O365 can keep your images and documents safe and backed up.
What’s on an Invoice?
Invoices normally contain reference information about the buyer, seller, product information and/or service information. The invoice should contain information such as the pricing, quantity, hours, tax rate (if applicable), and total price or amount. The invoice should also contain payment terms and information such as late penalties (if applicable) and payment due date.
The buyer information contains the company name (if applicable), first and last name of the individual person, billing address which may vary by country and contain information such as telephone, fax number and email address.
Usually a company name (if applicable), the first and last name of one of an employee of the seller such as an Account Representative, Sales Person, Accounts Receivable Employee or Account Manager. In some cases no person’s name is listed on the invoice and the company information is considered sufficient for identifying the seller.
The seller’s address may vary by country but would contain information such as telephone, fax number, email address. Usually the sellers legal name is listed on the invoices and sometimes referenced on the invoice with a statement such as “Make checks payable to:”
Invoice detail should include products or services or a combination of products and services. Routinely professional service invoices only contain services fixed bid or hourly. These types of invoices are typically issued by freelancers, Doctors, Lawyers, Accountants and Consultants. There are multiple types of invoices which include both products and services, those types of invoices are usually created by the following types of companies: Auto repair, landscape, HVAC (Heating Ventilation and Air Conditioning), home repair, appliance repair, construction. A common invoice of this type is a Time and Materials invoice.