The sales invoice is the official document used by almost all companies and organizations. These invoices are documents that show how much customers owe to the company for a product or a service. To inform the client, these documents contain details such as product name, product quantity, type of service, and payment date. Also, if there is a value-added tax or a discount applied, they must be stated in the invoice. Let’s examine the information and payment terms that should be included in the invoice, step by step.
When to Make Payments for Sales Invoice?
There is no definite time when the sales invoice is due. Of course, this doesn’t mean that you can pay at any time after you receive it. The invoice should contain information about when the customer should pay. The client can make the payment as soon as the invoice is received or after several months according to the information on the invoice. Detailed information should be given to clients on the invoice. It can also be stated on the sales invoice that a discount will be granted if paid before a specific date.
1. Due Upon Receipt
The customer must pay as soon as the invoice is received. Depending on the laws of the country that you live in, every day that the payment hasn’t been made, you may charge interest on the fee. If no payment is made, the company, institution, or organization may take legal action.
2. Within A Certain Time or Date
The customer is expected to pay within the date range specified in the invoice. This period can be 30 days or different date ranges depending on the agreement between the company and the customer.
3. Discount If You Pay Within Specified Time
In this payment method, which has the same characteristics as payment on a particular time or date, a discount is applied if the customer pays before a specific day. For example, if the customer pays the amount stated on the sales invoice within ten days, they may receive a 1% or 2% discount on this amount. The discount rate and date range to be applied may vary.
What Does a Sales Invoice Include?
While some information that should be included in a sales invoice varies by country, there are some details that should be included in each, no matter where you live and what business you do.
1. The Date
It is vital for both the customer and the company to provide a date on the sales invoice. This way, during accounting, the company knows when to receive or received payments, while the customer sees when to make or made payments. If you want your payment to be made within a particular time, you must specify the date that the invoice was prepared.
2. Names and Addresses
This should include the name and address of both the company and the customer. If you have created your invoice using digital billing software, just writing an email address would suffice. However, it may be helpful to have a full address and name of the client if you need to send any physical official documents or letters.
3. Contact Information
In addition to company and customer information, if there are individuals involved in the business contract, their contact information should be included in the invoice. Sometimes companies do not pay attention, but it is essential to write the individual’s name correctly to establish good business relationships.
4. Description of The Product or Service Received
Products or services purchased by the customer should be included on the invoice with their prices. If the number of products supplied is more than one, or if many different services are offered to the customer, they must be written separately, and the quantity numbers must be indicated. To avoid any confusion, write down product and service information on your invoices with as much detail as possible. In this way, both the customer and the company will have detailed information about the transaction.
5. Payment Terms and Date
As we mentioned before, information about when the customer should pay the sales invoice should be included under this headline. The customer should be informed in detail whether the payment should be made due upon receipt or will be made within a specified period like 20-30 days net. Also, details of the discounts to be applied in case of early payment should be mentioned here.
How to Make a Sales Invoice for A Customer?
Either if you use specialized accounting software for invoices, or using the traditional pen-paper method, you will be following the same process for both. Do not forget that you can only issue invoices after delivering products or providing service. You can prepare your invoice by following the steps which we stated above. Keep in mind that you may need to add some different data depending on the job or country of residence.
In the past, you can only send physical invoices, and thanks to technology, today you can send your sales invoices to your customers via email and save precious time.
What is the Difference Between Invoice and Bill?
Long story short the difference between those two accounting papers, is perspective. An invoice is a financial document written from the supplier’s point of view regarding the products delivered or services offered. The product or service is written individually so that the customer can check whether they have received them or not. On the other hand, a bill is a document that is written from the customer’s standpoint and informs him/her that payment is expected on a particular subject. Unlike invoices, bills are given to customers to pay immediately, not within a certain period.