Are you planning to create an invoice for your business so that you may easily fill these out and hand to your customers?
Before you can begin to create an invoice, you must make sure that you clearly understand the difference between an invoice and a receipt—the former being a formal request for payment and the latter, a proof of payment. When writing an invoice, you must follow the proper format of invoices in order to ensure its effectivity.
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What Is a Pro Forma Invoice?
In a normal sales transaction, a quotation is sent before a sales contract can be formed. When both the buyer and seller has come to an agreement as to the price of the items to be purchased, that’s when an invoice would be given to the customer.
There is, however, a special case when the terms of a sale may still be negotiated despite the fact the sales contract is already valid and enforceable. A pro forma invoice is the document that is sent by a business or a supplier to its customer or client upon delivery or before the delivery of the goods or materials purchased.
The main element that sets it apart from a generic invoice sample is the fact that the pricings listed on it is not absolute in the sense that it may still be subject to change. However, this does not mean that the client can desist from making payment for the items purchased since there has already been a legally binding sales contract before it.
A pro forma invoice sample serves as a quotation and as an invoice at the same time. This document contains similar elements as a basic invoice. Only the nature of its function makes it distinctively different from the basic invoice template.
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7 Tips for Sending the Perfect Invoice
Here are some tips that can help you in sending the perfect invoice:
- Label it. An invoice sample must have a label so that your customer would not have any confusion as to what the document’s purpose is. This may seem like a minute detail, however this is essential, especially in cases when there would be legal disputes regarding the factuality of a prior demand for payment. If your invoice has no label, then it is likely for you to not have the right to take the matter to court since the evidence that you show as proof of prior demand for payment is vague and unclear.
- Don’t forget your company’s branding. Whatever document you are releasing to customers or entities, you must continue the branding of your company. That is why your invoice should have the logo of your company. It must also follow the theme and color scheme of your other business documents.
- Address your recipient using their complete name. Nothing can stamp a positive feeling upon your customer’s memory than the fact that you remembered them and are actually using their full names in addressing them.
- Write a serial number for easy tracking. One of the most important uses of an invoice is for analysis of one’s business and its market trends. An invoice with a PO number would be easier to track and chronologically analyze together with other invoices.
- Remember to indicate the dates. This includes the date you are sending the invoice and most importantly, the date when you expect payment and the date when you have delivered or plan to deliver the goods purchased or perform the service availed.
- Be precise. Describe in detail the items you are asking payment for so that your customer would be more willing to pay.
- Send it on time. An invoice that is sent too late may not be given the attention it deserves since your customer may take it as your lack of urgency when it comes to getting paid for the items availed.
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What Is a Tax Invoice?
A tax invoice is a type of invoice. It is a document that is being prepared by businesses or suppliers to their customers if their customers are also resellers. In other words, a tax invoice templates is only a proper document when one’s customer is not the primary consumer of the product or goods being purchased but rather, another business or retail store planning to resell these products to the market.
The reason for the specificity of the type of invoice that must be issued in such a scenario is for the clarification of tax payments. A tax invoice can provide the specific taxable amount that is being included in the payment for the goods being purchased.
This would then serve as proof that the reseller has included in his/her payment that amount required by law for the tax rate that must be added on top of the base price of certain products if the purpose for its purchase is to resell it.A tax invoice has distinct elements that may not be present in the basic or generic invoice template.
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Invoice Submission Guidelines
When you are generating an invoice to your client or customer, it naturally follows that you expect your clients to settle his/her dues. In order to effectively produce such an effect or response, you must be able to send a perfectly effective invoice. Here are some guidelines you can follow:
- Honor the prices agreed upon between you and your buyer.
- Details are always important when it comes to providing pricings.
- Always proofread the contents of your invoice before sending it.
- Timeliness when it comes to sending your invoice is an essential element that contributes greatly to the effectivity of an invoice.
For more reference on the proper way of submitting and formatting of invoices, check out our website’s collections of construction invoice templates and other invoice templates.
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