Thanks to technological advancement, now business houses can generate different types of invoices for their clients.
However, the types of invoices you pick will depend on the way you charge for your products and services and the sector you work in. But why should one learn the types of invoices available? To know what to send, when to send, and who to send.
In this article, learn the 15 different types of invoices crucial for any business to send the right ones at the right time. So, let’s start.
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Standard Invoice
Unregistered under any indirect tax guidelines, these types of invoice is mostly generated and sent by small businesses and freelancers. Thanks to customization, this invoice makes it easy for all individual contractors and startups to bill their clients conveniently the way they want to.
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Proforma Invoice
One of the major types of invoice – Proforma invoice, helps clients understand what they’ve been billed for clearly and concisely. No matter if you offer services with flexible pricing or sell them globally, this invoice type can help. It outlines all the vital elements, from price and total amount to goods and service description.
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Credit Invoice
A company that wants to give a customer a discount, a refund, or to fix an earlier invoicing error can send a credit invoice. Also known as a credit memo or credit note, this type of invoice always has a negative total.
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Interim Invoice
Interim invoices are types of invoices that permit you to distribute bills periodically during the project while working on big assignments as opposed to waiting until the finish and sending one enormous invoice.
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Overdue Invoice
An invoice that has passed its due date is said to be late. A payment deadline is frequently stated when an invoice is sent. The sales invoice turns into an overdue invoice when the buyer doesn’t finish the payment by this deadline, and the customer is in default.
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Retainer Invoice
A retainer invoice, one of the most vital types of invoices, is sent to clients for future services. This invoice type urges the client to pay for the requested services in advance. It acts as a bill for prepayment to ensure the services will be readily accessible when needed.
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GST Invoice
When it comes to types of invoices in GST, the major one is the GST invoice. This invoice type comes with explicit transaction details, including the GSTIN (when applicable), products’ HSN code, description quantity, seller address and GSTIN, invoice number, and invoice date.
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Debit Invoice
Also referred to as a debit note or debit memo, these types of invoice is what every business uses when they intend to increase the bill payable amount. When it comes to adjusting an existing bill of a client, this invoice emerges as a saviour for all small and medium-sized businesses.
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Consolidated Invoice
When businesses need to collect all existing invoices under the name of the same client, they use the consolidated invoice. This solution to compile all invoices under a solo invoice with a single TOTAL makes it one of the most popular types of invoices. This helps clients save time by not having to pay every invoice separately.
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Timesheet Invoice
This timesheet invoice serves as a record of labour and an invoice. It is ideal for professionals, companies, or consultants who bill clients according to the hours spent on a project or assignment.
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Mixed Invoice
A mixed invoice is one of the unique types of invoice that contains both debit and credit bills, allowing the overall balance to be negative or positive. Businesses use a mixed invoice to raise the amount a client owes for a project while lowering it for another.
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e-Invoice
Electronic Invoice, popularly called e-invoice, is one of the major types of invoices in GST that the GST Network verifies itself. Started as an initiative by the Indian Tax Department on October 1, 2020, this type of invoice diminishes the practice of fake invoicing across the nation. Under the GST law, this invoice type applies to all regular taxpayers who register their annual turnover over a specified threshold.
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Commercial Invoice
A company issues a commercial invoice for products it sells to clients abroad. Commercial invoices offer the sale information required to calculate customs charges for international sales.
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Bill of Supply
As per the latest GST law, a bill of supply is a proper enlisted record of every single transaction that is exempt from taxes. Typically, it is the taxable composition of individuals who issue this type of invoice. However, what makes it unique from other types of invoices is the lack of tax figures in it.
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Recurring Invoice
A recurring invoice is a type of invoice sent to the same customer regularly for the same sum of money and the same service. Typically, the customer submits these bills, or the pre-agreed payment is automatically debited from their account.
Final Invoice
This final invoice is ideal for companies that must give their clients a breakdown of total expenditures after a project. It has sections for complete descriptions of all delivered goods and services, their separate pricing, and a grand total that includes all fees.
Conclusion
Depending on your sector and business strategy, you must familiarize yourself with the various invoice formats. Generally, before drafting the invoice, take some time to determine its objective. It might be done to negotiate, gather down payments, or change an earlier invoice. Once that is clearly stated, choose the effective invoice kinds.
Types of Invoices FAQs
- What are invoices for business enterprises?
An invoice is a properly recorded list of all the products or services you provide to a client. Business enterprises use invoices to outline the total amount the client owes them for those products or services.
- Who uses invoices? Which type of business is more keen to use them?
From vendors and suppliers to businesses and contractors of all sizes, every business enterprise now uses different invoices to bill their clients.
- What are invoices in GST?
A GST invoice is a declaration or receipt for products or services a business or service provider has provided to a client.