What are the Different Types of Business Invoices?

Patrick Roland

Business invoices are bills that detail the quantity of goods purchased, the cost, and the due date of payment. These documents are created by a seller and given to a buyer. They have a few standard items that are common to all invoices, like the above mentioned categories, but also differ in many other aspects. From standard invoices to pro forma invoices, credit memos and commercial invoices, each aims to prove a customer is entitled to certain goods for many different reasons.

A balance sheet is one of the most common statements used by businesses.
A balance sheet is one of the most common statements used by businesses.

A standard order invoice will follow a similar layout no matter if it is used for selling a few pencils, a few million barrels of olive oil or anything in between. This is considered the most basic billing document possible and provides a few necessary bits of information to both inform the purchaser of details and to keep for records. In addition to the standard listing of quantity, price and payment date, a standard invoice contains a unique order number, seller contact information and usually the word "invoice" somewhere on the document.

This standard model is widely used in invoicing around the globe, but many times different business invoices are needed. One such variation is the commercial invoice. This is a document accompanying international sales of goods that is often created in addition to a standard invoice. The commercial invoice lists a variety of specific data on the sale in order to meet customs demands for the countries involved in the sale. The purpose of these business invoices is to help officials calculate tariff rates.

Pro forma invoices are also utilized in international trade. These business invoices simply list the sellers and buyers of goods, the price, a description of the goods and mention the intent to sell internationally. This document normally precedes an invoice to alert proper customs officials of a pending international sale. A pro forma invoice is not issued until both parties have agreed on the specifics, like quantity and price.

Another type of service invoice deals with returned items. Known as a credit memo, these business invoices outline the value of credit given to a buyer if goods are returned. The amount can be equal or lesser than the purchase price, based on company policy, but the equation showcasing how this total was created is normally found on a credit memo.

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