Payment terms are independent of the invoice and are negotiated by the buyer and the seller. An invoice indicates the sale transaction only. Within the European Union, an invoice is primarily legally defined by the EU VAT directive as an accounting voucher (to verify tax and VAT reporting) and secondly as a Civil law (common law) document.Īn invoice should not be mixed up with Proforma Invoice that indicates commitment, intention, or prepayment request.įreebase Rate this definition: 0.0 / 0 votesĪn invoice or bill is a commercial document issued by a seller to a buyer, indicating the products, quantities, and agreed prices for products or services the seller has provided the buyer. The document indicates the buyer and seller, but the term invoice indicates money is owed or owing. From a buyer's point of view, an invoice is a purchase invoice. To avoid confusion and consequent unnecessary communications from buyer to seller, some sellers clearly state in large and capital letters on an invoice whether it has already been paid.įrom a seller's point of view, an invoice is a sales invoice. The buyer could have already paid for the products or services listed on the invoice. These may specify that the buyer has a maximum number of days to pay and is sometimes offered a discount if paid before the due date. Payment terms are usually stated on the invoice. Wikipedia Rate this definition: 0.0 / 0 votesĪn invoice, bill or tab is a commercial document issued by a seller to a buyer relating to a sale transaction and indicating the products, quantities, and agreed-upon prices for products or services the seller had provided the buyer.
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