The world, today, is a global market, with businesses from different countries conducting transactions both locally and internationally. Therefore, it is imperative to keep records of all the transactions.
This is where the invoice steps in. An invoice is a document that maintains a record of all your transactions.
In essence, an invoice serves to remind the buyer to make a payment after the goods or services have been provided. It is universally acknowledged that faster invoicing leads to faster payments.
The task of keeping records of the sales plus saving the copies of the invoices may sound simple. In truth, it requires a significant amount of time and storage space, especially if you happen to have a heavy load of invoicing to be done.
Therefore, we find companies on the look-out for efficient ways of invoicing. Hence, we see that the invoice used may differ from company to company.
A business dealing in wholesale may have a very different invoice from one that is used in a construction company.
However, invoice templates have made life considerably easy for the modern entrepreneur. Moreover, we find that these invoice templates provide the differing invoices that are required in the various fields of commerce. Businesses today have a lot of choices - from word templates to electronic invoicing.
Taking a look into the different types of digital invoices available would certainly be time-saving and a viable solution to your accounting needs.
Standard invoice
To begin with, there is a standard invoice. As the name suggests, this is the basic invoice that requires essential information such as the name of the seller, address, contact details, items purchased and of course, the invoice number.
It is used by many small organizations belonging to several different business backgrounds.
Commercial invoice
Next, in line comes the commercial invoice. The commercial invoice, also known as the business invoice, is designed for the documentation of any trade that is done internationally.
It holds great importance as it is used during the customs declaration when the product is crossing international borders.
Apart from the basic information that an invoice shows, a commercial invoice also exhibits the tax payable, the carrier identification number, country of origin and the harmonized code for each item.
It must also clearly show that the document is authentic as well as hold the signature of the person in charge of the transaction. And, there is space provided to include special notes or comments.
Progress invoice
There is also a progress invoice. These are used in transactions that stretch over a period of time.
Hence, we find that most construction companies use a progress invoice as the length of time is considerable and the project quite expensive.
So, the progress invoice depicts the progress that is being made in the project and also serves to remind of the payments that are to be made.
Timesheets
Invoices that are required to record services rendered rather than a product sold, exclusively for intellectual concern, the timesheet is the best possible answer.
It is preferred by professionals such as consultants, psychotherapists, and lawyers whose services are evaluated based on the time period for which the service is being provided.
We find that a timesheet invoice is usually used when products are given on rent or the employment of laborers is to be calculated - as this invoice mentions the 'time that is given' rather than 'the product that is used'.
Utility invoice
This is the most commonly used invoice that is generally referred to as a bill. Unlike other invoices, a utility invoice mentions a due date, the amount of penalty payable after the due date and the billing period. Moreover, it states the previous amount paid or due. The electricity or gas bills that are common the world over are the best example of a utility invoice.
Pro-forma invoice
A proforma invoice is a document that gives the buyer a rough idea of the cost of products and services. It is, therefore, referred to as an estimation or a quote.
It is not a true invoice, hence, it is not recorded into the accounts as a receivable or payable.
In fact, it is used as a seller's declaration to show his willingness to commit to an agreement to deliver specified goods or services at an estimated price.
Debit Memo
A debit memo is generally sent to a buyer when a large bill has been incurred but only paid in half. It serves as a reminder and also shows the remaining balance that is to be paid along with any late fees.
Pending invoice
Much like the debit memo, a pending invoice simply states the amount that has not been paid. If the seller chooses to pay in partial payments, then a pending invoice is sent until the entire amount has been paid to the seller.
Value-based billing
This invoice is used by service providers. It is based upon the amount of work delivered and not on the time that is required to complete a project.
It is client-based focusing on the needs of the buyer, and the fee is determined in advance.
Fixed-bid billing
This kind of billing is suited to projects with well-defined specifications. The pricing of the products is known, the quantity decided and the time period specified. For small businesses, it can prove profitable if large orders are contracted.
Time-based billing
Naturally, services rendered often vary. Some require specified time whereas other projects cannot have a specified time. Time-based billing is done for projects where the time cannot be certain.
However, companies often decide upon an hourly rate and that is used to calculate the price to be paid by the buyer. Since the rate is agreed upon by both parties, there is no contention.
The varying types of invoice templates available in the market are numerous. Not to mention, most are free. Furthermore, they can even be customized to suit the needs of your company.
The benefits of invoice templates are as varied as they are necessary. Companies need only to take the step forward and try out invoicing templates and reap the many advantages it offers. A good place to start your search is https://www.freshbooks.com/invoice-templates/word.
This article is copyrighted by Travelers Today, the travel news leader
