Here are 7 Ways to Create Invoices that Business Owners Must Know
Invoices are often used as evidence of a transaction between the seller and the buyer.
So, its existence is quite important because it can make business transactions safer for both parties.
For sellers, invoices can be used as a means of collecting payments to their customers.
This is because, in the invoice there is a bill that shows the amount that must be paid by the buyer and when the maximum time to pay it off.
For buyers, invoices can be proof of purchase of goods to be included in financial statements.
Of course, the contents in the invoice are usually determined according to the agreement of both parties.
Therefore, in this article, we will discuss how to make an invoice that is easy and appropriate, so you can also use it in business.
Come on, see more!
What is an Invoice and Its Uses?
Before knowing how to create an invoice, let's first know the full meaning and function of the invoice.
Invoice is a document issued by the Seller as proof of a purchase transaction of goods or services.
Usually, an invoice contains details of the payment debt that must be repaid by the buyer.
Generally, sellers make invoices in a triple way.
So, the duplicate will be provided to the buyer, a deposit of documents for the seller and finally for the company's archives.
Although the origin of invoices was given for transactions in the form of credit, it is now often used for various types of transactions.
As a business owner, it is mandatory to issue invoices when making sales transactions because in the future this document can be used for debt collection.
Functions and Uses of Invoices
A company with a credible business, of course, has a way and the ability to make invoices properly and correctly.
In fact, until now there is nothing that can replace the effectiveness of invoices in running a business.
Meanwhile, the use of invoices that are common and important for business is as follows.
1. Proof of Payment or Receipt for Buyer
Invoices can be used by buyers as receipts that function as documents to help pay for the purchase of goods or the use of services that have been made.
Invoices are usually made when the purchase bill is large enough so that receipts are needed so that all goods and services can be properly documented.
2. Documentation of The Company's Accounting Activities
In addition, for business owners, invoices are used as a recapitulation of accounting activities.
Of course, this is quite important because companies with credible businesses are supposed to have as detailed financial records as possible.
This is done so that transaction documents can be found easily.
This document can also be used as material for analysis and financial reports, so you can understand how your business is actually running.
How to Create Invoices for Business Owners
After knowing the complete meaning of invoices and their uses, here's how to create invoices for business owners.
How?
1. Write the Invoice Title
The first way to create an invoice is to write the title of the invoice.
You can write the title of the invoice at the top of the middle and in capital letters.
For example "INVOICE PURCHASE OF YARN FABRIC"
Meanwhile, this is intended so that buyers can more easily realize that what you send is an invoice document when you are dealing with many documents.
That way, the buyer can take precedence to make payments according to the contents stated in the invoice.
2. Don't forget to include the buyer's name and address
Next, of course, you have to include the name of the buyer or anyone who is obliged to make a payment.
Meanwhile, the name listed together with the address of the buyer.
The existence of this information will make the buyer who made the transaction with you know that the invoice is intended for him.
3. Clearly inform the name and address of the seller
In addition, your name and address as a selling company must also be clearly stated.
This is useful for informing whom payments will later be received.
4. Make a list of goods or services sold or ordered
How to create an invoice on this one is very important and the essence of an invoice.
You must include in detail a detailed list of goods or services provided to the buyer.
For example, if the transaction is in the form of purchasing goods, write a description of the product name, quantity, price per unit and the total.
In addition, if the invoice is for the field of services such as consulting services, then write in detail the project name, job description and tariff according to the agreement.
Better, you use tables so that the detailed information is easy to read.
Also make sure to make it as complete as possible so that there is no confusion when reading it.
5. Enter the transaction date
This is also important when creating an invoice, because it can be a way to find out the period of the document.
You need to write down several dates, namely the date of purchase of the product in, the date of issuance of the invoice, or the use of services until the payment limit date.
Regarding the payment deadline date, it can be discussed with the buyer which is best for both parties.
6. Create an invoice number
Furthermore, it would be better if you create a number for the invoice.
Thus, it will be easier when filing documents.
You can use a special code followed by a sequential number for each invoice issued.
7. Inform the payment terms according to the agreement
Finally, this is also an important thing that must be mandatory in the invoice.
You as a seller are important to know and get certainty when the payment will be paid off.
Generally, invoices have a period of 30 days from the time they are issued, which means that the buyer must pay within that time limit so that they are not late in paying and get late fees.
It can be labeled with n/30 or Net 30.
However, again, this is certainly adjusted to the provisions of each company and the decisions of both parties.
How now do you know how to make the right invoice?
Good luck!
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