What is a Billing Invoice?

B. Miller

A billing invoice is a document requesting payment for services rendered or goods sold. It is generally a paper document, though some businesses or individuals now do their invoicing entirely online. A billing invoice is a way for both the seller and the consumer to keep track of money spent on goods and services; independent contractors frequently use billing invoices to keep track of their taxes as well.

An invoice is a bill detailing services rendered or products purchased and their overall cost.
An invoice is a bill detailing services rendered or products purchased and their overall cost.

There are many invoice templates to be found online for free, or it is possible to just create one on the computer. Depending on the type of business or service, a billing invoice can include a variety of information. This typically includes the name and address of the company, as well as any other information such as a tax identification number or other contact information. Next, the invoice should include line items regarding what is being billed.

For instance, if a service is being billed, the line items might include a description of the service, the date, the time it took, the hourly rate, and the total cost for that line. The hours should generally be specified; for instance, 11 a.m. to 3 p.m., which often makes the billed customer feel more at ease. If the billing invoice is for goods, each line might include a description of the item, its cost, the number of items purchased, taxes and fees, and the total. A billing invoice should be logical and easy to read.

Each column should be totaled at the bottom of the billing invoice, followed by a clear description of the amount that is owed. Some people also include a brief notation of any payments that had been previously paid and credited to one's account. In general, it is a good idea to make the invoice as simple as possible, and to only include information that is necessary. If a client requests that extra information be included on a billing invoice, then it may be added.

In addition, a billing invoice may be kept as a receipt by both parties. Each person should keep a copy of invoices for their records, should any disputes ever arise. These invoices can also be used to figure out taxes at the end of the year; this is especially important for independent contractors, who must pay quarterly estimated taxes throughout the year, and can check the invoices to find out exactly how much income they have had.

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