An invoice normally depicts a record of a sale agreement and it will contain the address of the seller and that of the customer with a description of the consignment. For effectiveness in business, there is a need for customers to be given more flexible payment options for one to be able to serve clientele in a better way. Within the US there are various types of invoices and each type has a specific purpose. We have six common types of invoices in the US.
Pro forma invoice
A pro forma invoice is given out before completing a transaction or particular work to notify the customer on how much is supposed to be paid once a good is delivered or a service is performed to completion. At times it is also used to estimate the value of goods that someone will give out as a gift. When used in offering a service it acts as a commitment to offer something or provide a service to completion, and at times the value indicated on it can change due to market changes.
An interim invoice is normally used in big projects to divide the project into multiple payments. It is normally adopted by contractors who take up big projects and would require funds to spend on labor, purchase materials to enable them to complete the projects in a good time. This has helped to empower small business people in the US to apply for big projects without fear of where they will get the funds from to execute the big projects hence empowering them to be big entrepreneurs.
A final invoice is normally sent after a project has been completed to notify the client that the project is complete. It is different from a pro forma invoice in that it acts like a demand for payment as the work that the two parties had agreed has come to completion. It normally harbors inventory of the products and services that were included in the project, their total cost, the due date that the money is required and the mode of payment that will be used. In the US final invoices are normally sent electronically to avoid wasting time in going to pick the funds manually.
Past due invoice
Past due invoice is another common type of invoice in the US and it applies when there is a delay in settling a payment. It normally sent after a final invoice has not been honored, and it is to act as a reminder and it includes the date when the final invoice was due as well as interest that the delayed money earns as a penalty for late settlement of payments. Normally when not hired, then collections agencies and auctioneers may be employed.
There is a recurring invoice that is issued for ongoing services and it applies to cases where the amount charged periodically is the same. In the US people are cognizant of their physical fitness and normally visit fitness places, this type of invoice is important to keep reminding its loyal customers that they need to make a payment at some point.
At times people send goods and they might be damaged, be stale or not be the right goods, to keep the relationship between the client and the customer the client will issue a credit memo of the same amount of money that the client parted with when paying for the goods that are in contention. This is to acknowledge a mistake hence repaying the customer.