Invoice

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For the Japanese company, see Invoice (company).
See also Voucher: an invoice is within the European union primarily legally defined by the EU VAT directive as an accounting voucher (to verify tax and VAT reporting) and secondly as a Civil law (common law) document.

An invoice, bill or tab is a commercial document issued by a seller to a buyer, relating to a sale transaction and indicating the products, quantities, and agreed prices for products or services the seller has provided the buyer.

Payment terms are usually stated on the invoice. These may specify that the buyer has a maximum number of days in which to pay, and is sometimes offered a discount if paid before the due date. The buyer could have already paid for the products or services listed on the invoice.

In the rental industry, an invoice must include a specific reference to the duration of the time being billed, so in addition to quantity, price and discount the invoicing amount is also based on duration. Generally each line of a rental invoice will refer to the actual hours, days, weeks, months, etc., being billed.

From the point of view of a seller, an invoice is a sales invoice. From the point of view of a buyer, an invoice is a purchase invoice. The document indicates the buyer and seller, but the term invoice indicates money is owed or owing.

Invoice[edit]

I N V O I C E
Company Name
123 Fake Street
Springfield






Invoice No
   Date 
Terms
DescriptionAmount Owed:
Invoice Total[Currency]

A typical invoice contains[1][2]

In countries where wire transfer is the preferred method of settling debts, the printed bill will contain the bank account number of the debtor and usually a reference code to be passed along the transaction identifying the payer.

The US Defense Logistics Agency requires an employer identification number on invoices.[4]

The European Union requires a VAT (value added tax) identification number.

In Canada, the registration number for GST purposes must be furnished for all supplies over $30 made by a registered supplier, in order to claim input tax credits.[5]

Recommendations about invoices used in international trade are also provided by the UNECE Committee on Trade, which involves more detailed description of the logistics aspect of merchandise and therefore may be convenient for international logistics and customs procedures.[6]

The EU VAT union Invoice definition The European Union value added tax union - Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax article 226 is a concise definition of invoices within the union member states.

Without prejudice to the particular provisions laid down in this Directive, only the following details are required for VAT purposes on invoices issued pursuant to Articles 220 and 221:

The EU VAT union Receipt (simple invoice) definition The European Union value added tax union - Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax article 226b is a concise definition of Receipts within the union member states.

As regards simplified invoices issued pursuant to Article 220a and Article 221(1) and (2), Member States shall require at least the following details:

They may not require details on invoices other than those referred to in Articles 226, 227 and 230.

Variations[edit]

There are different types of invoices:

Electronic invoices[edit]

Some invoices are no longer paper-based, but rather transmitted electronically over the Internet. It is still common for electronic remittance or invoicing to be printed in order to maintain paper records. Standards for electronic invoicing vary widely from country to country. Electronic Data Interchange (EDI) standards such as the United Nation's EDIFACT standard include message encoding guidelines for electronic invoices. The EDIFACT is followed up in the UN/CEFACT ebXML syntax cross industry invoice.

EDIFACT[edit]

The United Nations standard for electronic invoices ("INVOIC") includes standard codes for transmitting header information (common to the entire invoice) and codes for transmitting details for each of the line items (products or services). The "INVOIC" standard can also be used to transmit credit and debit memos.[10] The "IFTMCS" standard is used to transmit freight invoices.[11]

In the European Union legislation was passed in 2010 in the form of directive 2010/45/EU to facilitate the growth of Electronic Invoicing across all its member states. This legislation caters for varying VAT and inter-country invoicing requirements within the EU, in addition to legislating for the authenticity and integrity of invoices being sent electronically. It is estimated that in 2011 alone roughly 5 million EU businesses will have sent Electronic Invoices.[12]

Open Application Group Integration Specification (OAGIS) from OAGi[edit]

The XML message format for electronic invoices has been used since the inception of XML in 1998. Open Application Group Integration Specification (OAGIS) has included an invoice since 2001. OAGi (Open Applications Group) has a working relationship with UN/CEFACT where OAGi and its members participate in defining many of the Technology and Methodology specifications. OAGi also includes support for these Technology and Methodology specifications within OAGIS.

UBL[edit]

The XML message format for electronic invoices has been used in recent years. There are two standards currently being developed. One is the cross industry invoice under development by the United Nations standards body UN/CEFACT and the other is UBL (Universal Business Language) which is issued by OASIS (Organization for the Advancement of Structured Information Standards). Implementations of invoices based on UBL are common, most importantly in the public sector in Denmark as it was the first country where UBL is mandated by law for all the invoices of the public sector. Further implementations are under way in the Scandinavian countries as result of the NES (North European Subset) project. Implementations are also underway in Italy, Spain, the Netherlands (UBL 2.0)[13] and with the European Commission itself.

The NES work has been transferred to CEN (European Committee for Standardisation), (the standards body of the European Union) workshop CEN/BII, for public procurement in Europe. The result of that work is a pre-condition for PEPPOL, pan European pilots for public procurement, financed by the European commission. There UBL procurement documents will be implemented in cross border pilots between European countries.

Agreement has been made between UBL and UN/CEFACT for convergence of the two XML messages standards with the objective of merging the two standards into one before end of 2009 including the provision of an upgrade path for implementations started in either standard.

ISDOC[edit]

ISDOC is a standard that was developed in the Czech Republic as a universal format for electronic invoices. On 16 October 2008, 14 companies and the Czech government signed a declaration to use this format within one year in their products.

Payment of invoices[edit]

Organizations purchasing goods and services usually have a process in place for approving payment of invoices based on an employee's confirmation that the goods or services have been received.[14][15][16][17]

Typically, when paying an invoice, a remittance advice will be sent to the supplier to inform them their invoice has been paid.

Standardisation[edit]

Invoices are different from receipts. Both invoices and receipts are ways of tracking purchases of goods and services. In general the content of the invoices can be similar to that of receipts including tracking the amount of the sale, calculating sales tax owed and calculating any discounts applied to the purchase.[18] Invoices differ from receipts in that invoices serve to notify customers of payments owed, whereas receipts serve as proof of completed payment.

See also[edit]

References[edit]

External links[edit]