Preparation of Invoice, Receipts, Voucher
by An invoice is a document that describes the goods and services that a company offers to a customer and specifies the customer’s responsibility to pay for those products and services. Invoices are the foundation of a small business’ accounting system. An invoice details how much your client owes you when payment is due and what services you rendered.
Invoices are the business records that allow companies to get paid for their services, so invoicing is critical for small businesses. Invoice can be defined as “a list of goods sent or services provided, with a statement of the sum due for these; a bill.”, as per the Oxford English Dictionary.
Types:
- A standard invoice is the most common form of invoice used mainly by small businesses and flexible to fit in most industries and billing cycles.
- credit notes and debit notes. It is also known by names such as credit memo and debit memo. Credit and debit notes are used for decreasing value and increasing values of previously raised invoices, respectively.
- For instance, credit notes are used while the business wants to pass on a discount or provide a refund to its customers or buyers. On the other hand, debit notes are used to increase the quantity or value of the original invoice.
- Another type of invoice is the pro forma invoice. A pro forma invoice is an estimation that a company sends to a customer before delivering services. A pro forma invoice gives the client an estimation of the cost of the work that needs to be done. When a project is completed, pro forma invoices need to be adjusted to represent the hours worked accurately.
- A commercial invoice is a document provided by a company for products it sells to consumers worldwide. Commercial invoices provide information about the sale that is required to calculate customs duties for cross-border transactions.
- A timesheet is an invoice used when a company or employee bills depending on the number of hours they work and their hourly rate of pay. Contract workers who are paid hourly by their contractor use timesheets.
- There are other types of the invoice such as expense report, interim invoice, final invoice, past due invoice, recurring invoice and e-invoice.
An ideal invoice will have the following contents:
- A header with your business name and logo
- Invoice number or a unique identifier
- Your business location and information
- Invoice date
- Description of goods or services sold and quantity
- Additional charges, fees or taxes
- Total amount due
- Payment terms
- Due dates
A tax invoice should have the following components:
- Name, address, and GSTIN of the supplier or seller
- Name, address, and GSTIN of the recipient or buyer, if it’s registered under GST
- HSN code or SAC for goods and services
- Invoice number, serially numbered and unique in every financial year
- Type of invoices such as a tax invoice, supplementary invoice or revised invoice
- Description of goods or services supplied
- Units or quantity of goods and services
- Tax rate for every item on the invoice
- Amount of CGST, SGST, IGST or UTGST in separate columns
- State of supply and place of supply
- Total amount of goods and services supplied
- Delivery address, in case it is not the same as the place of supply
- If a reverse charge is applicable, then it must be duly mentioned
- Digital signature of the supplier or any authorised person
Receipts
A receipt is a written acknowledgment that something of value has been transferred from one party to another. In addition to the receipts consumers typically receive from vendors and service providers, receipts are also issued in business-to-business dealings as well as stock market transactions. For example, the holder of a futures contract is generally given a delivery instrument, which acts as a receipt in that it can be exchanged for the underlying asset when the futures contract expires.
Types:
- Gross receipts such as cash register tapes, deposit information (cash and credit sales), receipt books, invoices, forms 1099-MISC
- Receipts from purchases and raw materials (These should show the amount paid and confirm that they were necessary business purchases; documents could include cancelled checks or other documents that identify the payee, amount, and proof of payment/electronic fund transfers.)
- Cash register tape receipts
- Credit card receipts and statements
- Invoices
- Petty cash slips for small cash payments
Invoice Voucher
A voucher is a bond of the redeemable transaction type which is worth a certain monetary value and which may be spent only for specific reasons or on specific goods. Examples include housing, travel, and food vouchers. The term voucher is also a synonym for receipt and is often used to refer to receipts used as evidence of, for example, the declaration that a service has been performed or that an expenditure has been made. Voucher is a tourist guide for using services with a guarantee of payment by the agency.
The term is also commonly used for school vouchers, which are somewhat different.
Account voucher
A voucher is an accounting document representing an internal intent to make a payment to an external entity, such as a vendor or service provider. A voucher is produced usually after receiving a vendor invoice, after the invoice is successfully matched to a purchase order. A voucher will contain detailed information regarding the payee, the monetary amount of the payment, a description of the transaction, and more. In accounts payable systems, a process called a “payment run” is executed to generate payments corresponding to the unpaid vouchers. These payments can then be released or held at the discretion of an account’s payable supervisor or the company controller.
The term can also be used with reference to accounts receivable, where it is also a document representing intent to make an adjustment to an account, and for the general ledger where there is need to adjust the accounts within that ledger; in that case it is referred to as a journal voucher.
Any documentary evidence supporting the entries recorded in the books of accounts, establishing the arithmetic accuracy of the transaction, may also be referred to as a voucher for example, a bill, invoice, receipt, salary and wages sheet, memorandum of association, counterfoil of paying-in slip, counterfoil of cheque book, or trust deed.
Vouchers are used in the tourism sector primarily as proof of a named customer’s right to take a service at a specific time and place. Service providers collect them to return to the tour operator or travel agent that has sent that customer, to prove they have given the service. So, the life of a voucher is as below:
- Customer receives vouchers from tour operator or travel agent for the services purchased.
- Customer goes to vacation site and forwards the voucher to related provider and asks for the service to be provided.
- Provider sends collected vouchers to the agent or operator that sends customers from time to time, and asks for payment for those services.
- Uncollected vouchers do not deserve payment.
This approach is most suitable for free individual tourist activities where pre-allocation for services is not necessary, feasible or applicable. It was customary before the information era when communication was limited and expensive, but now has been given quite a different role by B2C applications. When a reservation is made through the internet, customers are often provided a voucher through email or a web site that can be printed. Providers customarily require this voucher be presented prior to providing the service.
