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What is an Invoice?
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An
Invoice
is essentially a detailed bill left by vendors and
outside suppliers for goods or services rendered to a
company. A typical invoice
might list the quantity of each item, prices, billable
hours, service description and a contact address for
payment. While some expenses may be paid out of a
general fund or petty cash account, an invoice is
usually paid through an accounts payable department by
the posted due date.
An invoice
is a legal document which can be used as evidence of an
incurred debt. The recipient of the goods or services
can challenge the legitimacy of individual charges, but
the invoice itself is considered a bona fide debt.
Sometimes a vendor or serviceman cannot collect on a
bill immediately, so their company will send an invoice
at a later date for payment. |
The actual daily expense of a service may be so low that a
company will simply wait for a larger invoice to cover all
of the costs at once. Vending machine attendants and bottled
water providers may only send one invoice a month instead of
billing the company a few dollars a day for supplies.
Not all invoices are bills of sale, however. A manufacturer
may send out a 'shipping invoice', which details all
of the parts and accessories included in a particular order.
This shipping invoice should be compared to the actual parts
received by the store or customer. Car dealers also receive
an
invoice from the factory which details the actual price
of the basic vehicle and any optional equipment installed.
The dealer may offer a discount to the customer which seems
to fall below the invoice price.
The use of an invoice as evidence of a legitimate debt
can sometimes be abused. Unscrupulous companies may generate
false invoices to account for missing funds or to inflate
sales numbers to stockholders. An invoice is only
enforceable and legal if corroborative evidence (inventory,
duplicate bills, etc.) proves the goods actually exist or
the service was actually performed. Companies and
individuals do have the right to challenge suspicious
invoices in a court of law.
Some companies who use invoices frequently will design their
own forms, but generic invoice forms can be ordered
at office supply stores. There are also computer programs
available which can generate specialized invoice forms
through the use of templates. A professional invoice
should contain detailed information on the goods or
services, clear and accurate prices and current contact
information for any
billing questions a client may have.
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