Invoice
An invoice is a document issued by a seller to a buyer that records a transaction and requests payment. It includes an itemized list of goods or services delivered, their prices, applicable taxes, and payment terms.
What an invoice contains
A standard invoice includes:
- Seller and buyer details (name, address, tax ID)
- A unique invoice number and issue date
- A description of each item or service, with quantity and unit price
- Applicable taxes broken down by type and rate
- The total amount due and payment terms or due date
Invoices and tax compliance
An invoice is the primary document used by tax authorities to verify that VAT or sales tax has been correctly calculated and collected. In many jurisdictions, businesses are legally required to issue an invoice for every taxable sale, and the invoice must meet specific formatting and content requirements to be considered valid.
Once an invoice has been issued (paid or sent to a customer), it cannot be modified. International tax standards require this to prevent inconsistencies in tax filings and fraud. To correct a mistake, follow the process to correct invoices by issuing a credit note.