Definition: An invoice is a document issued by a seller to the buyer that indicates the quantities and costs of the products or services provider by the seller.
An invoice specifies what a buyer must pay the seller according to the seller’s payment terms. Payment terms indicate the maximum amount of time that a buyer has to pay for the goods and/or services that they have purchased from the seller.
An invoice indicates that a buyer owes money to a seller. Therefore, from a seller’s point of view, an invoice for the sale of goods and/or service is called a sales invoice. From a buyer’s point of view, an invoice for the cost of goods and/or services rendered is called a purchase invoice.
An invoice has historically been a paper document mailed to the buyer, but these days sellers can request payments online with electronic invoices.
Typically, an invoice document will contain a combination of the following details: