Types of Invoices

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Invoices are the basis for a company's accounts receivable.
Invoices are the basis for a company's accounts receivable. (Image: Dynamic Graphics/Creatas/Getty Images)

An invoice is a bill for items purchased or services rendered. It may be as simple as a handwritten document, or it can be electronically created through a company's accounting software. Invoicing is an integral part of a corporate financial system. The ability to produce and track the payment of invoices is necessary to maintain cash flow.

Standard

A standard invoice is a bill created and presented to a customer for items or services he purchased. The standard invoice is typically a pre-printed form that contains the company name, address and telephone number. As a new invoice is created, the date of purchase, customer information and a unique invoice number must be added. The items or services purchased are referred to as line items and are listed in the body of the invoice. Instructions for payment may also be included on the invoice, such as requesting that the invoice number be printed on the payment check.

Recurring

A recurring invoice is generated on a preset time schedule for items or services that are rendered on a regular basis. For example, if a customer uses a cleaning service once a week, an invoice will automatically be generated each week for the predetermined amount of the cleaning service. If you carry an insurance policy that is automatically renewed annually or semi-annually, an invoice will automatically be generated when payment is due. In most cases, a recurring invoice will be for the same amount each time, unless a price change occurs or additional items or services are added during the time period between invoices.

Monthly

A monthly invoice is created for customers who retain an open charge at a business. The amount of the invoice will fluctuate each month depending on what items were charged or what services were performed. For example, a business that uses a fleet of vehicles may have a charge account at the local service station so that drivers do not have to pay at each fill up. Each month, an invoice will be sent to the company listing all gas purchases for that month. Depending on the circumstances, this type of invoice can be weekly, quarterly or based on any time period that is agreed upon by both parties.

Estimate

An estimate invoice may also be referred to as a quote invoice. Companies that perform a good number of estimates for products or services can create the proposal as an invoice. If the potential customer decides to purchase the product or service, a new invoice need not be created. The customer can simply make payment from the estimate invoice unless the quote must to be altered in some way. This type of invoice usually contains a disclaimer stating how long it is valid. If the potential customer decides not to make the purchase, the estimate invoice will become null and void after that date.

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