This word in itself speaks volumes. For a lender and borrower or any business transaction an invoice is a detailed valid document. It serves as a bill for goods sent or services provided with the local taxes applied. Generating and sending invoices is not a process that should be skipped or ignored. A properly designed invoice helps a business get paid and provides legal protection for both parties. Invoices substantiate with the internal auditors for accounting purposes as well.
There are different invoice templates available and different formats too. However the details that are written on an invoice are designed according to the deal and terms. The invoice carries with it the terms and conditions that are agreed upon. This aids as a supporting document in case of any arbitration along with the contractual agreement.
It is practical, to have the invoice simple, relevant and not very complicated It is also prudent to follow the same format with all vendors to maintain consistency.
The invoice reflects all details about the vendor and the lender, with address and contact information.
Most importantly the financial components on time frame of payment, penalty for delayed payment are mentioned on the invoice. An annexure too is given sometimes which mentions all the agreed upon term and conditions. In case of an arbitration this would be a valid document along with the contract signed.
The invoice has to have the relevant tax identification related numbers designated by the government. These can be as printed formats or templates.
Another tip would be to include a list of all available payment options that your business supports at the bottom of the invoice, giving the customers varied options if they are not able to pay via a particular method. Card payment, cash on delivery, cheque, bank transfer, direct debit are to name a few. This helps in eliminating excuses.
What would be even more helpful is to have a guideline on how to pay via these different methods and mentioning the exact date on which the end-customer has to pay will be more effective rather than just mentioning “pay within 30 days” or “due upon receipt”.
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