What is “account”
Invoice is a commercial document that enumerates a transaction between a buyer and a seller. If goods or services were purchased on credit, the invoice typically indicates the terms of the transaction and provides information about the available methods of payment. The invoice also known as receipts, bills or invoices.
Companies can choose to just send in the end of the month statement as accounts for all pending transactions. If so, the statement must indicate that no further invoices will be sent. Historically, invoices were recorded on paper, often with multiple copies are created so that the buyer and seller each have a record of the transaction for their own records. Currently, computer invoices are quite common. They can be printed on paper or sent by e-mail to transaction participants. Electronic records also allow for easier searching and sorting of specific transactions or specific dates.
Breaking down the “account”
The invoice must specify that the invoice on the face of the bill. It usually has a unique identifier called an account number-invoices, which is useful for internal and external links. The invoice usually includes the contact information for the seller or service provider if there are errors relating to the billing. Payment terms can be specified in the invoice, as well as information regarding any discounts, early payment details or Finance charges assessed for late payments. He also represents the cost per unit of product, number of units purchased, transportation, loading, unloading, transportation and related tax charges, and it specifies the total amount of debt.
The importance of date of invoice
Date of invoice is the official date in which the goods were written off. Thus, from the date of receipt of the account has important information regarding payment, as it determines the loan period and period bills. This is especially important for businesses that offer loans, such as net 30. Actual date of the invoice, usually 30 days after date of invoice.
Invoices and accounts payable
Invoice to track the sale of product for inventory management, accounting and tax purposes. A company to ship the product and expect payment at a later date, so the total amount due becomes payable to the purchaser and receivables to the seller. Modern invoices transmitted in electronic form, not paper. If an invoice is lost, the buyer can request a copy from the seller. The use of invoices is the availability of credit, and the seller has sent the product or provided the service without cash.
Invoices and internal control
Invoices are one of the most important elements of accounting internal control. Charges in the invoice must be approved by the responsible management. In addition, the invoice in accordance with the purchase order and the matching information, the payment is made for approved transactions. The auditing firm ensures invoices are entered into the appropriate reporting period when verifying cutoff score.
With the advent of computer era, people and businesses make it easier to rely on the use of electronic invoices as alternatives to paper documents. Electronic invoicing or e-invoicing is a form of electronic invoices for the creation, storage and control of documents for the transaction between the parties and to provide the terms and conditions of the agreement are met. These electronic documents may include invoices and receipts, purchase orders, debit and credit notes, payment terms and instructions and remittance receipts. Digital invoices are normally sent via e-mail, Web page or application. The advantages include consistency and resistance to physical damage; easy searching and sorting on specific names, terms and dates; increase of controllability; the ability to print and reproduce on demand; data collection and business intelligence; reducing the use of paper.
E-invoice includes several technologies and options entry and being used as a General term to describe any method by which the invoice is electronically presented to the customer for payment. Several electronic invoices standards such as edifact and UBL, have been developed in the world with the aim of promoting implementation and effectiveness.