Have you ever wondered what an invoice is from a business owner's or a freelancer's perspective? If you are not in the finance or accounting industry, you might not have heard of this terminology before. Regardless of whether you're just about to embark on the start-up life, or a student having difficulty grasping the meaning behind this word, we are here to help.
According to the Collins English Dictionary, an invoice is defined as “a document issued by a seller to a buyer listing the goods or services supplied and stating the sum of money due.”
In short, an invoice specifies the total amount the buyer has to pay the seller for purchasing goods and services. There will be a payment term reflected in the invoice, allowing the buyer to pay within the duration agreed.
The payment term varies according to the payment conditions agreed upon when the products are bought. Some buyers will make immediate payment once they receive the goods, whereas some buyers choose to make the payment after 10 or more days from the invoice date.
In the next article: Learn the purpose of an invoice.