An invoice is basically a written message that transforms the fact of sending or receiving money into Accounting books. It’s a primary document that describes the goods or services that the money was received or spent for.
Despite a common misconception, an invoice on its own is not a contract in a legal sense. It doesn’t prove an agreement between two parties. Instead, an invoice requests payment for services and therefore is a one-sided document.
Invoices also show the government the aspect for applying exact taxes and also confirm your type of activity. Βy world standards invoices should contain:
A type and a place of service, as well client data
- invoice number;
- date of issue and date due to;
- name and contact of counterparties;
- a line detailing all products or services;
- cost per unit, the total amount of money owed, applied taxes, and tax rates;
- the place of service (i.e. a jurisdiction).
in some cases can affect the tax rates, thus it’s very important to complete these fields in the document.The other fields
help to record precisely your sales and income. Again, for taxes and accounting. However, the whole invoicing process is done not just for the sake of bookkeeping but also to structure the processes of your company correctly.An invoice number
, for example, is not a random sequential code. You should not put as simply number invoices '1', '2', '3', etc. as this can be confusing further as numbers reach double or triple figures. Rather, you’d better have an invoicing system. Normally, a number might refer to the year, the name of the agreement, and then a longer sequential number comes.