Digital Invoicing Glossary5 min readReading Time: 2 minutes
With the introduction of digital invoices, the terms used while preparing invoices have become very important for both those who prepare the invoices and the customers who will pay in line with the invoices. Anyone who buys a product or service, not just accountants, should now be familiar with the financial terms. Let’s examine the terms that must be included in the digital invoice, item by item.
Digital Invoice Requirements
The phrase “Invoice” must be written in an easily visible way on the invoices. Invoices that must have a unique invoice number, when prepared in the digital environment, prevent confusion as consecutive invoice numbers are automatically assigned by the system.
The name, address, and contact information of the company issuing the invoice must be included on the invoice. In some countries, the invoice is required to bear certain information for taxation. For example, many countries require the company’s tax number to be included on the invoice and the invoice date is essential. The information pertaining to the company which will make the payment against the invoice should also be included on the invoice.
After the party information is written in detail (which can be filled with a single click with the software), the product or service information subject to the invoice should be written together with the quantity and price details. If there is a purchase order sent by the customer, the serial number of the relevant document should also be stated on the invoice. Payment terms are crucial to be included as well because they are binding. Afterward, payment method details and necessary explanations can be added.
Frequently used Invoicing Terms
Payment Receipt: Once the customer pays the amount on the invoice, they send the payment receipt to the seller. This document is the proof of payment.
Price: It is the information you see how much you will pay for the product or service you receive. Prices are shown as a unit.
Fee: Charges that include additional charges such as taxes and delivery and exclude the product price, are shown on the invoice.
Discount: A certain percentage of the total amount can be discounted on the price offer. This amount is deducted from the total amount.
Total: The total amount that the customer is required to pay. It covers the product price, all relevant fees and discounts included.
Balance: If the customer has not made the full payment or the seller has not delivered the entire product, the remaining amount is expressed with the word balance.
Although the number of words used for digital invoicing is abundant, we have gathered here a few common terms for you. There are also terms used for individual or corporate invoices and terms used in relation to payment terms and conditions. We recommend that you take a look into other blog posts on Speedy to learn in detail the words that express the time to pay and the time to deliver.
Today, whether you are a seller or a customer, it will be useful for you to learn these terms. As mentioned above, everyone, but not just accountants, should be familiar with this basic terminology.