Invoice
What is an invoice?
An invoice is the seller's request for payment. It lists what was sold and what is owed.
The net amount is the price before VAT. The gross amount is net plus VAT: what the customer must pay.
To the seller it is a sales invoice. To the buyer it is a purchase invoice.
Example
A printer invoices a café for flyers. The net amount is £200.00 and the VAT shown on the invoice is £40.00. The gross amount, which the café must pay, is £240.00.
Why it matters
An invoice changes what is owed, so it goes into the books. A quotation, a purchase order and a delivery note do not.
Practise it
Module, 5 rooms, all freeBusiness documents
Practise it nowHow to read a sales invoice
Ledger Drill is practice, not tax or accounting advice. If this looks wrong, tell us at [email protected].