Invoices are an essential part of running a business organization, as it talks about all the aspects of a particular transaction. Through time people have changed the way of recording these transactions due to the impact of technology. The basic idea is to make everything easier and accountable. In this same manner, small business organizations tend to maintain sales invoices that reek of flexibility. This makes the transaction easier and has led to the formation of many types of invoices. So, here are all the types of invoices for small businesses.
1. Interim Invoice
An interim invoice breaks down the value of the product, as you send interim invoices for the whole transaction or complete amount. Depending upon the size of the product, factors such as labour and operating costs vary. So by sending interim invoices, you can receive payments when required, rather than waiting till the project gets over. This type of system is highly useful for all kinds of projects that require huge operating and maintenance costs.
2. Pro Forma Invoice
A Promo Forma Invoice can be classified as an invoice that is sent to the customer, once the product or service is completed. At times, it is also used as an estimate of the work and the cost of all the items involved in the transaction. Such terms and conditions will vary based on the type of project that you are involved in.
3. Past Due Invoice
A Past Due Invoice is the backup option, in case the actual invoice goes unnoticed. When a customer does not pay the required amount of money despite reaching the end of the due date, certain businesses send them a Past Due Invoice indicating the failure of payment. These invoices include all the necessary information mentioned in the actual invoice, including additional fees for delaying payment.
4. Final Invoice
The Final Invoice is nothing but a demand for payment. It indicates and lets the customer know that the work is completed and that it is pay time. This invoice will include a list of all the items that you provided, the total cost, due date and mode of payment.
5. Credit Memo
A Credit Memo is not a form of demanding payment; instead, it is one that acknowledges the fact that you owe someone money. It will either be equal to the original amount of the invoice or be lesser than the actual amount.
6. Recurring Invoice
Recurring Invoices are used to provide customers with the bill for ongoing services. This particular amount gets charged periodically, till the end of the transaction. Subscription to magazines or newspapers and membership fees are few of the invoices that utilize the recurring format.