Invoice

An invoice is a commercial document issued by a seller to a buyer that itemizes goods or services provided, the amounts owed, payment terms, and a due date. A complete invoice includes: your business legal name, address, and taxpayer ID (EIN or SSN); the customer's name, billing address, and customer reference number if any; a unique sequential invoice number; the invoice date and due date; clear line items with quantity, unit price, and extended amount; subtotal, applicable sales tax, shipping, and grand total; payment terms (Net 15, Net 30, 2/10 Net 30, etc.); and accepted payment methods with remittance details. Under accrual accounting, issuing an invoice creates a journal entry: debit Accounts Receivable, credit Revenue (and possibly credit Sales Tax Payable). The invoice itself is the legal basis for collecting payment and is the primary supporting document for revenue recognition under ASC 606. In some jurisdictions, certain invoice elements are legally required for tax-deductibility on the buyer's side or for sales-tax purposes. Electronic invoicing (e-invoicing) is increasingly required for B2G (business-to-government) transactions and large enterprise customers.