An invoice is a commercial document issued by a seller to a buyer requesting payment for goods or services delivered, itemising amounts owed and the due date.
An invoice is a formal request for payment. It is issued by a seller (supplier) to a buyer (customer) after goods are delivered or services are rendered — or, for prepayment arrangements, in advance. At minimum, an invoice identifies the parties, describes what was sold, states the price and any applicable taxes, and specifies when payment is due. Together these elements give both parties a shared record of the transaction.
Invoices serve several business and legal functions. For the seller, an invoice is the trigger for revenue recognition and the source document for accounts receivable. For the buyer, it authorises the accounts-payable payment and provides the document needed to reclaim VAT or sales tax. For tax authorities, invoices are the primary audit trail for VAT/GST compliance. Most jurisdictions require businesses to issue invoices for taxable supplies and to retain them for a statutory period.
The contents of a compliant invoice vary by country and transaction type, but typically include: a unique invoice number, the invoice date, seller's name, address, and tax registration number, buyer's name and address, a description of goods or services, quantity, unit price, any applicable tax rates and amounts, the total amount due, the payment due date, and bank account or payment method details.
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