Definition (canonical)
An invoice is a commercial document a seller issues to a buyer, stating what was sold, for how much, and on what payment terms. It is simultaneously a payment request, a tax record and — in disputes — evidence. In most jurisdictions B2B sales legally require one.
What every invoice must contain
Across jurisdictions the core set is stable: unique sequential number, issue date, seller and buyer identification with tax IDs, description of goods or services, quantities and unit prices, net amount, tax rate and amount, gross total, and payment terms with due date. Numbering discipline matters more than it seems: gaps and duplicates are the first thing a tax audit flags. Electronic invoicing is the global direction of travel — several countries already mandate structured e-invoices through government platforms.
Types you will actually meet
Proforma — a preview before the deal; carries no tax or accounting effects. Advance/deposit invoice — documents prepayment before delivery. Credit note (correcting invoice) — fixes errors or processes returns; never delete an issued invoice, always correct formally. Recurring invoice — the workhorse of subscriptions. Knowing which document applies protects you: paying against a proforma from an unverified counterparty is a classic fraud pattern, because no delivery obligation is evidenced yet.
Invoicing so you get paid faster
The data is unambiguous: invoice immediately upon delivery (every day of delay in issuing shifts the whole cash flow chain), state a concrete due date rather than "net 30" jargon, include payment details prominently, and automate reminders — a polite nudge three days before due date outperforms an angry one two weeks after. For chronic late payers, prepayments and factoring beat hope.
FAQ
Is a scan or PDF a "real" invoice? In most regimes yes, provided authenticity and integrity are assured; structured e-invoices via national platforms increasingly replace PDFs in B2B.
Can I issue an invoice before delivering? Rules vary; many jurisdictions allow limited pre-issuance windows. The safe default: invoice at or right after delivery, prepayments via advance invoices.
What if the buyer ignores the invoice? Escalate on schedule: reminder, formal demand, statutory late-payment interest, then debt collection — each step documented by the invoice itself.
How long must invoices be stored? Typically five to ten years depending on jurisdiction, in a form that preserves integrity and legibility. Structured e-invoicing platforms handle archiving automatically — one of their quiet advantages.
Related: Payment Terms · Cash Flow · Factoring Reviewed: 2026-07-15 · Sources: EU invoicing rules