An invoice is a detailed bill left by vendors and outside suppliers for goods or services rendered to a company. Typically, it lists the quantity of each item, prices, billable hours, a service description, and a contact address for payment. While some expenses may be paid out of a general fund or petty cash account, an invoice is usually paid through an accounts payable department by the posted due date.
As a legal document, an invoice can be used as evidence of an incurred debt. The recipient of the goods or services can challenge the legitimacy of individual charges, but the document itself is considered a bona fide debt. Sometimes, a vendor or serviceperson cannot collect on a bill immediately, so the company will send a bill at a later date for payment. In other cases, the actual daily expense of a service may be so low that a company will simply wait until the charges have accumulated to a certain point, and send a bill to cover all of the costs at once. Vending machine attendants and bottled water providers, for example, may only send one invoice a month instead of billing the company a few dollars a day for supplies.
Not all invoices are bills of sale, however. A manufacturer may send out a "shipping invoice," which details all of the parts and accessories included in a particular order. This document should be compared to the actual parts received by the store or customer. Car dealers also receive an invoice from the factory that details the actual price of the basic vehicle and any optional equipment installed. The dealer may offer a discount to the customer which seems to fall below the invoice price.
The use of an invoice as evidence of a legitimate debt can sometimes be abused. Unscrupulous companies may generate false ones to account for missing funds or to inflate sales numbers to stockholders. This document is only enforceable and legal if corroborative evidence, such as inventory, duplicate bills, etc., proves the goods actually exist or the service was actually performed. Companies and individuals do have the right to challenge suspicious invoices in a court of law.
Some companies who use invoices frequently will design their own forms, but generic forms can be ordered at office supply stores. There are also computer programs available which can generate specialized ones through the use of templates. A professional invoice should contain detailed information on the goods or services, clear and accurate prices, and current contact information for any billing questions a client may have.
