Step 1
Prepare the customer and billing information
Confirm who receives and approves the invoice before you send it. Use the agreed billing currency and customer details, and include a purchase order reference if the buyer requires one. Keep the delivery address separate when goods go to another location.
- Confirm the customer name, billing address and contact.
- Assign a unique invoice reference and issue date.
- Record the order reference and agreed payment deadline.
Step 2
Build and review the line items
Describe each item or service clearly. Check quantities, units, prices and discounts against the order. Tax information depends on your transaction and jurisdiction; select the applicable treatment before calculating the final amount.
- Multiply quantity by unit price for each line.
- Apply agreed discounts and applicable taxes.
- Show freight, subtotal, currency and total due separately.
Step 3
Send the invoice and reconcile payments
Send the reviewed document to the billing contact and keep the issued copy. Apply each payment or credit to that invoice. An open invoice has an unpaid balance; an overdue invoice has an unpaid balance after its agreed due date.
- Include payment instructions and the invoice reference.
- Record payment dates, amounts and references.
- Follow up using the remaining balance after payments and credits.
Worked example
Example: a partially paid invoice
An invoice totals 1,200 in the agreed currency. The customer pays 400 and receives a credit of 100. The outstanding balance is 1,200 − 400 − 100 = 700. Keep the original invoice and both adjustment records together.
Illustrative example; use your own transaction data.
Frequently asked questions
What is the difference between an invoice and a receipt?
An invoice requests payment for a supply. A receipt acknowledges a payment received. Use both when you need a record of what was billed and what was paid.
Should I overwrite an invoice after a return?
Preserve the issued record and use the appropriate linked adjustment document for the transaction. This keeps the original bill and resulting balance traceable.