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What’s more, humans are prone to mistakes, and a small misinformation in your invoice can result in severe loss.

If done manually, invoicing can consume you a lot of time as well as money. Many companies ship the product and expect payment on a later date, so the total amount due becomes an account payable for the buyer and an account receivable for the seller. Invoices track the sale of a product for inventory control, accounting and tax purposes. Electronic records also allow for easier searching and sorting of particular transactions or specific dates. They can be printed to paper on demand or sent by email to the parties of a transaction.

Currently, computer-generated invoices have changed the scenario. Invoices have traditionally been recorded on paper, often with multiple copies generated so that the buyer and seller each have a record of the transaction for their own records. Types of invoices may include a receipt, a bill of sale, debit note, or sales invoice. If goods or services were purchased on credit, the invoice usually specifies the terms of the deal and provides information on the available methods of payment. In simple words, it is a commercial document that itemizes and records a transaction between a buyer and a seller.Īn invoice tells your client how much they owe you, when the payment is due and what services you provided. Invoices are a critical element in business.