Reference · 36 terms

Invoicing glossary

Every term you will meet on an invoice, a remittance advice or a client's accounts-payable query — defined in plain English, with one link to the tool or guide that puts it to work. No signup, no downloads, no jargon explaining other jargon.

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36 terms across 4 categories

Documents

Invoice: A dated request for payment that lists what was supplied, what it cost and when the money is due. It is a commercial document, not proof that payment happened — that is a receipt.Every field an invoice needs →
Tax invoice: An invoice that carries the extra details a tax authority requires — usually a vendor or VAT registration number, the tax charged and a serial number. Only a registered vendor may issue one.SARS tax invoice requirements →
Proforma invoice: A good-faith preview of an invoice, sent before work starts or goods ship. It shows the same line items and totals but is not a demand for payment and must not be filed as revenue.Proforma invoice vs invoice →
Credit note: A document that reduces what a client owes, issued after an invoice. It is the correct way to handle a refund, a return or a billing error without editing the original invoice.Credit note vs invoice →
Debit note: The mirror of a credit note: a document that increases the amount owed on an earlier invoice, for example when work was under-billed or extra costs were approved later.How credit and debit notes differ →
Receipt: Proof of payment, issued after the money arrives. It usually repeats the invoice number and the amount paid, which is what makes reconciliation possible.Invoice vs receipt →
Quote (estimate): A fixed offer of price and scope before work begins. Accepting a quote is what usually authorises the work; the invoice that follows should match it, line for line.Turning a quote into an invoice →
Purchase order (PO): The client's internal authorisation to buy, carrying its own reference number. Quoting the PO number on your invoice is one of the cheapest ways to survive an accounts-payable queue.Get invoices paid faster →
Statement of account: A running summary of every invoice sent, payment received and balance outstanding for one client. It is a chase document, not a new invoice.Keeping invoice records →
Remittance advice: A note a payer sends with a payment listing which invoices it settles. Without one, a single bank transfer can take an afternoon to allocate.Payment terms that prevent confusion →
Self-billing: An arrangement where the customer raises the invoice on the supplier's behalf. It only works with a written agreement, because the customer is now creating your tax documents.The invoicing workflow guide →

Money & tax

Retainer: A recurring fee paid to keep a provider available, usually monthly and usually invoiced in advance. It is different from a deposit because it buys capacity rather than work already done.Invoicing as a freelancer →
Deposit: A partial payment taken before work starts or goods ship. Invoice it as its own document or line, and state clearly whether it is deducted from the final total or additional to it.Payment terms explained →
Line item: One row on an invoice: a description, a quantity, a unit price and a line total. Vague line items are the most common reason a client queries an invoice.Invoicing products vs services →
Unit price: The price for one unit — one hour, one item, one day — before quantity and before tax. It is what a client's procurement team checks against their PO.Build a clean invoice number series →
Subtotal: The sum of the line totals before document-level discounts and before tax. Showing it separately is what lets a client verify the arithmetic without a calculator.Discounts on an invoice →
Gross and net: Net is the amount before deductions; gross is what the client actually pays once tax is added. A document that writes "total" without saying which one is ambiguous.Calculating VAT on an invoice →
VAT: Value-added tax, charged on most goods and services in the UK, South Africa, the EU and many other markets. Only registered vendors may charge it, and it must be shown as its own line.UK VAT invoice generator →
GST: Goods and services tax — the same idea as VAT under a different name in Australia, Canada, India, New Zealand and Singapore.Canadian GST invoice generator →
Sales tax: The US state and local tax added at the point of sale. Unlike VAT there is no federal rate, so the correct percentage depends on where the buyer is.US invoice generator →
Withholding tax: Tax a client is required to deduct before paying you, then remit to the tax authority. Always invoice the full amount and show the withheld tax as a separate deduction.Tax lines on an invoice →
Zero-rated: A supply that is taxed at 0% rather than being exempt. The distinction matters: zero-rated sales usually still count towards registration thresholds and can still be claimed as input tax.VAT rules for South African invoices →

Payment & timing

Payment terms: The agreed rule for when payment is due — "Net 30", "due on receipt", "50% deposit" — plus any early-payment discount or late fee attached to it.Calculate a due date →
Net 30: Payment is due 30 calendar days after the invoice date, not 30 working days. Net 7, 14, 45, 60 and 90 follow the same pattern.Net 30 due date calculator →
Due date: The last day on which payment can arrive and still be on time. Put it on the document itself — a term like "Net 30" forces the client to do date arithmetic.Work out the exact due date →
Grace period: A short window after the due date before a late fee or interest applies. It is a goodwill concession, so state its length explicitly if you offer one.Late payment interest calculator →
Late fee (interest): The charge applied to an overdue balance, either a flat fee or an annual percentage. It only works if the rate or amount is written into your terms before the work starts.Calculate interest on an overdue invoice →
Aging report: A list of outstanding invoices grouped by how long they have been unpaid — current, 1–30, 31–60, 61–90 and 90+ days. It is the single most useful collections view for a small business.Track invoice status →
Bad debt: An invoice you no longer expect to collect. Writing it off keeps your receivables honest, though it does not remove the underlying tax treatment rules in your jurisdiction.Records that support a write-off →

Records & process

Invoice number: The unique reference that identifies one document in a series. It must be stable, because it is the handle clients, accountants and auditors use to find the invoice again.Invoice number generator →
Invoice date: The date the document is issued, and the date most payment terms count from. It is not necessarily the date the work was done or the date the invoice was sent.See how the date drives the due date →
Void invoice: An invoice cancelled before payment. Leave it visible in your records, marked void, and keep the number — deleting it creates the exact gap that invites questions.Numbering rules that survive an audit →
Reconciliation: Matching bank transactions to the invoices they settle. It is only quick when every invoice number and payment reference is unique and recorded consistently.How to record payment details on an invoice →
Audit trail: The record of what was issued, changed, voided and paid, in order. Once a document has left your hands, the trail — not the file on your laptop — is the evidence.Keep your business details on file →
E-invoice: A structured invoice exchanged machine-to-machine through a government or network platform, rather than a PDF sent by email. Mandates are spreading across the EU, Latin America and Asia.Paper vs digital invoices →
Recurring invoice: A template that produces the same invoice on a schedule — weekly, monthly, quarterly. Each issue still needs its own unique number and its own payment records.Set up predictable payment terms →