Different types of invoices for the small business


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An invoice is a commercial document given by the seller to the buyer for collection of payment, this is the most basic and elementary definition of the invoice. If you operate a small business, you must have come across several types of invoices, a small business needs to send and receives hundreds of invoices every month, so it becomes crucial for small business operators to know about various types of invoices and their functions. If you are wondering about what is an invoice management system, it makes invoicing easy and convenient and reduces clerical errors in invoices.

In this blog, we will try to explain various kinds of invoices and their functions so that you can choose the best invoice for your business.

Pro forma Invoice 

Usually, an invoice is sent after the completion of the sale but, sometimes the buyer needs to know the estimated price before placing the order in such crucial times pro forma invoice comes into the picture.  A Pro forma invoice is not an invoice in the real sense, it is a dummy invoice created for the buyer so that he can know about the estimated price. Its only purpose is to give a rough idea to the buyer and it is never recorded in the account books of the company.

Interim invoice 

Interim invoices are useful when the project size is large, time-consuming requires heavy machinery and a large number of labours. To maintain the cash flow in such businesses interim invoice is used, interim invoice divides the total payment into several smaller payments to ensure cash flow in the business. Interim invoices reduce the risk of the seller; instead of waiting for the completion of the project, he gets payments at fixed intervals, therefore, it reduces the risk of default from the side of the payer.

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Recurring invoice 

Recurring invoices are suitable for those businesses which work with the subscription-based plan or fixed monthly fee that recurs every month. A recurring invoice is just like a normal invoice but, its contents remain the same every time except for dates. Small businesses need not put so much effort into preparing recurring invoices every month, you can use a free invoicing software download system for preparing recurring invoices automatically.

Credit invoice 

 Credit invoices are statements that acknowledge that the company owes money to the buyer; normally, the buyer owes money to the company, but sometimes due to the company’s negligence, the buyer may be entitled to receive money. For example, the company delivered wrong or defective goods, there was an error in the price or instructions were not followed. In these conditions, the company amend the previous invoice and acknowledge its debt, this is known as a credit invoice. 

Timesheet invoice 

Businesses or workers who work on an hourly basis use the timesheet invoice format for asking the payment. This is mostly used by law firms, freelancers, photographers, chartered accountants, counsellors and writers. In the timesheet invoice service provider, give detail of hourly rate, administrative fees and total hours of work done. 


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