What is an invoice?
An invoice formally requests payment and records a sale. For the seller it creates [accounts receivable](/glossary/accounts-receivable); for the buyer it creates [accounts payable](/glossary/accounts-payable). In many countries a valid tax invoice is required to reclaim [VAT](/glossary/value-added-tax-vat) or other sales taxes.
What to include
- The word "Invoice" and a unique, sequential invoice number
- Invoice date and supply date
- Seller's business name, address and tax ID
- Customer's name and address
- Description, quantity and unit price of goods or services
- Subtotal, tax rate and tax amount, and total due
- Payment terms (for example, Net 30) and due date
- Accepted payment methods and bank details or a payment link
Types of invoices
- Standard invoice
- Pro forma invoice: a quote-style preview before the sale is confirmed
- Recurring invoice: for subscriptions or retainers
- [Credit note](/glossary/credit-note): reduces a previous invoice
- E-invoice: a structured digital invoice, increasingly required by tax authorities (see [XML e-invoicing](/glossary/xml-e-invoicing))
Tips to get paid faster
- Invoice as soon as the work is done.
- Use clear, short payment terms.
- Add online payment options.
- Send automatic reminders before and after the due date.