invoicing

Examples of invoicing in the following topics:

• Accounts Payable

  • Suppliers offer various payment terms for an invoice .
  • A/P payment terms may include the offer of a cash discount for paying an invoice within a defined number of days.
  • For example, the 2/10 Net 30 term means that the seller will deduct 2% from the invoice total if payment is made within 10 days and the invoice must be paid within 30 days.
  • When the three documents are matched, the invoice is paid.
  • An invoice payable in 30 days is typically recorded as accounts payable.

• Reporting Receivables

  • The aging report, for example, shows how long invoices from each customer have been outstanding.
  • Generally the accounts in an aging report are subdivided into categories based on how overdue the invoices are.
  • For example, all the unpaid invoices posted in the past month are current, all the unpaid invoices from the prior month are over 30 days, the unpaid invoices from two months ago are over 60 days, etc.

• Trade Credit or Accounts Payable

  • An accounts payable is recorded in the A/P sub-ledger at the time an invoice is vouchered for payment.
  • In a business, there is usually a much broader range of suppliers to pay, and accountants or bookkeepers usually use accounting software to track the flow of money into this liability account when they receive invoices and out of it when they make payments.
  • Increasingly, large firms often use specialized automation solutions (commonly called ePayables) to automate the paper and manual elements of processing an organization's invoices.
  • When the invoice is received by the purchaser, it is matched to the packing slip and purchase order, and if all is in order, the invoice is paid.
  • For example, three-way matching may be limited solely to large-value invoices, or the matching is automatically approved if the received quantity is within a certain percentage of the amount authorized in the purchase order.

• Factoring Accounts Receivable

  • A company sells its invoices at a discount to their face value when it calculates that it will be better off using the proceeds to bolster its own growth than it would be by effectively functioning as its "customer's bank. "
  • On the other hand, the factor assumes the entire credit risk under non-recourse factoring (i.e., the full amount of invoice is paid to the client in the event of the debt becoming bad).
  • The seller then sells one or more of its invoices (the receivables) at a discount to the third party, the specialized financial organization (aka the factor), often, in advance factoring, to obtain cash.
  • Accordingly, the factor obtains the right to receive the payments made by the debtor for the invoice amount and, in non-recourse factoring, must bear the loss if the account debtor does not pay the invoice amount due solely to his or its financial inability to pay.
  • External fraud by clients: fake invoicing, mis-directed payments, pre-invoicing, unassigned credit notes, etc.

• Terms of Trade

  • An example of a common payment term is Net 30, which means that payment is due at the end of 30 days from the date the invoice is issued.
  • This means that the operator has 60 days to pay the invoice in full.
  • If sales are good within the first week, the operator may be able to send a check for all or part of the invoice, and make an extra 20% on the ice cream sold.
  • However, if sales are slow, leading to a month of low cash flow, then the operator may decide to pay within 30 days, obtaining a 10% discount, or use the money another 30 days and pay the full invoice amount within 60 days.The ice cream distributor can do the same thing, receiving trade credit from milk and sugar suppliers on terms of Net 30, 2% discount if paid within ten days.

• Organizational issues

  • The lack of communication and coordination resulted in scheduling snafus and invoicing problems.
  • The Account Manager's primary task is to meet the customer's total needs, and to make sure the invoices for work performed are issued in a timely manner.
  • Operations' primary task is to meet the needs of the Account Manager and the needs of the Office Manager with respect to information required to process invoices and payroll.
  • They notify the Account Manager that a job is complete, provide the necessary job costing and billing information so that the Account Manager can notify accounting that an invoice should be issued.
  • This department's primary task is to issue invoices and manage payables, receivables, and to provide management with timely financial reports.

• Classifying Receivables

  • In most business entities, accounts receivable is typically executed by generating an invoice and either mailing or electronically delivering it to the customer.
  • An example of a common payment term is Net 30, which means that payment is due at the end of 30 days from the date of invoice.

• Basics of Cash Management

  • The related documents generally include purchase orders, receiving reports, and invoices.
  • A current liability, such as a credit purchase, can be documented with an invoice.

• Boundless and Bookstores

  • We will invoice your institution periodically based on the number of access codes used, rather than the number initially purchased.

• Defining Accounts Receivable

  • In most businesses, accounts receivable is executed by generating an invoice and either mailing or electronically delivering it to the customer.
  • In turn, the customer must pay the invoice within an established timeframe, which is called the credit terms or payment terms.