There are many types of invoices, but the most important types are: sales invoice and purchase invoice.
sales invoice is used as a purchase guide to the consumer as data on the quantities purchased, the elements, the discount, as well as to show the debts owed or to record the amount paid and so on.
The sales invoice is also submitted to inform the buyer of any goods purchased in the middle of the transaction.
The purchase invoice is given by the seller to the buyer at the end of the transaction as proof of the sale.
It is known that the sales invoice performs the same function as the purchase invoice.
for example: the data to be used to create the financial statements.
In this article, we will explain to you in detail the definition of a sales and purchase invoice.
as well as the importance and how to issue each, follow with us.
What is a sales invoice?
It is a commercial document identifying the goods and services that the consumer buys from a company.
As well as the price and quantity agreed upon, and the buyer must pay to the seller under the various payment conditions.
The sales invoice is one of the important elements in the sales process
As it resembles a record of the transaction between the buyer and the seller, and helps the seller to manage his financial affairs, and track his sales, and the sales invoice provides important information to the consumer.
Why is the sales invoice important?
The reasons for the importance of the sales invoice include:
- Payment Confirmation: The sales invoice confirms the entitlement or the payment process.
- Legal compliance: Some States enact laws to impose sales invoices on individuals and companies, and impose severe penalties if they are not issued.
- Dispute resolution: The sales invoice acts as evidence of the terms of the transaction in the event of any misunderstanding or dispute between the two parties, to avoid the interruption of relationships and disagreements.
- Record-keeping: The buyer uses the sales invoice as evidence of the transaction, and the seller uses it for accounting and tax purposes, as it is a record of the transaction.
- Professionalism at work: The issuance of this invoice reflects a high degree of credibility and professionalism at work.
- Evidence of the transaction: the sales invoice is used as evidence of the buyer-seller sale and contains important data, such as: services or goods sold, date of sale, agreed price, quantity, as well as any sales taxes in effect.
How to issue a sales invoice
Qoyod enables you to issue a sales invoice easily and conveniently, especially if you have a business model, just do the following:
- Create your own sales invoice form using word processing software or spreadsheet.
- Add your company logo, name, as well as your address at the top of the bill.
- Place the client’s address, name, date of transaction, and invoice identification number..
- Add a description of the services or goods provided, the unit price, and also the quantity.
- Put the shipping company’s contact information and name.
- Calculate the total outstanding amount.
- Add different payment methods and terms, and any other relevant information.
- Check the invoice well; so as to ensure that all the data in it is easy to read and correct.
What is a purchase invoice?
It is a document sent to you by the supplier explaining the services or goods provided to the customer.
As well as the amount owed by you, and you credit the amount in favor of the supplier’s account.
The purchase invoice acts as proof of the transaction between the seller and the buyer, and is considered a request for payment. It is important to build credibility and trust with customers, and manage cash flow in companies.
A purchase invoice is also considered the issuance of a purchase order.
The importance of the purchase invoice
A purchase invoice has a great importance.
It is the register of all commercial processes of the purchase and sale between the parties concerned, in addition to the following:
- Evidence of the trader’s sales and all the money he requested in return.
- Helps buyers speed payment.
- Determine the payment dates and conditions, as well as the time of payment of installments, if any.
- Evidence to buyers of complete professionalism at work.
How to issue a purchase invoice
The purchase invoice must contain all the information about the quantity of items, and the total amount.
As well as a summary of the terms of the transaction, such as: the period allowed for delay between payment and transaction, and in order to issue any purchase invoice, you must follow the following:
- Go in the right side list to the “Purchase invoices” section.
- Press the purchase invoice button to start issuing the invoice, and you will find it in the upper left corner.
- Select the invoice number.
- Choose the currency in which you received the invoice from among the existing currencies.
- Create a contact for the supplier directly in the invoice form, and you can choose that contact from the contact list.
- Assign the purchase invoice to the selected vendor project if you want to track whether the project is profitable.
- Select the date on which the invoice was created, and hence the date of entitlement.
- Specify in the purchase invoice line the following:
– Directly issue the item you want to invoice, or select it.
– Write a brief description to illustrate the details of the item you want to buy.
o Choose the type of account you wish to classify expenses in, most often operational expenses.
o Indicate the price and quantity of the goods you bought.
o Add a discount and value added tax rate.
- You can put details on how to pay in the note.
- Click Save to automatically change your invoice to “approved” invoice.
Invoices are an important tool for confirming the payment process between the seller and the buyer.
It helps the buyer in tracking his sales and managing his financial affairs. There are many types of invoices, but the most important types are: sales invoice and purchase invoice, and the definition, terms and characteristics of each differ.
But they are similar in that they perform the same function: the data that will be used to generate the financial statements.