In its simplest form, a supplier invoice is a sales invoice that is issued by the business that has supplied the goods or services to the customer who has taken receipt of these.
Invoices are a vital part of running a business. They are the key piece of information that helps your business to ultimately get paid.
Of course, it would be lovely if every business got paid on time every time, but unfortunately, as we all know, this is not always the case.
This is where our commercial debt recovery services come in.
Supporting commercial businesses in the successful collection of late payment of invoices, we work with accounts and credit control departments to ensure your cash flow continues flowing.
Visit our page for more information on the services we can offer and how commercial debt recovery could work for you.
A guide to supplier invoices
Supplier invoice definition
A supplier invoice is used to itemise the transaction between a buyer and seller.
Acting as a credit invoice (as the goods will have already been received), the invoice will specify payment terms, the payment due date, as well as the payment methods that are accepted.
Note: If you issue an end-of-the-month statement, this can also act as a sales invoice, highlighting all outstanding transactions. However, this must be made clear in all communication with your customer. Don’t leave any room for error or the opportunity for a company not paying their invoice to arise.
Supplier invoice explained
Sales invoices can be in the form of a paper-based document, or today they will typically be generated electronically and issued via email.
With the right accounting software, you can also automate your invoicing and statement issuing process, helping to improve your accounts payable process, reduce invoice turnaround times, and free up resources within your credit control team.
In addition, automating your invoicing processes and procedures can also:
- Improve workflows
- Prevent and reduce errors
- Save time
- Produce timely bill payments
- Reduce late payments from occurring
- Help you to stay organised as everything is recorded
- Help you track invoices
- Reduce costs
- Reduce the volume of manual work required.
Details of `what is a supplier invoice`
A supplier invoice, as previously mentioned, is issued to the customer after the goods and services have been provided.
This means businesses must input the data to ensure the invoice is issued, and the invoice must be followed up on to ensure it is paid.
Supplier invoices help businesses track and account for how much their customers owe, and with the right information, prevent late or incorrect payments from being made.
Included in a supplier invoice should be:
- Total cost
- Any VAT/Tax
- Full business name and contact details/information
- Customer name and contact details
- Invoice number
- Dates – date of invoice issue and date payment is due
- Description of goods and services (these should be itemised with individual prices attached so customers can see the breakdown)
- Payment terms – these are vital in ensuring you get paid by the due date. If payment is not received by this point, the consequences of late payment of the invoice include late payment fees, interest charges, and information passed to a debt recovery agency, among other penalties.
Benefits of a supplier invoice
- By matching your invoices to your purchase orders, you can track everything better and make your accounting run more effectively.
- You can see a breakdown of what has been purchased allowing you to track and manage supply and demand.
- You can see how much revenue the company is expecting to receive.
- Invoicing also helps you manage your expenses and keep your financial records in order.
- Invoicing helps you to budget and plan better; however, you need to ensure payment due dates are adhered to for effective planning.
Invoice not paid
Also known as a vendor invoice, a supplier invoice ultimately requests payment for goods and services that a business has supplied. They will show payment terms, due dates, methods of payment, and more.
Good invoice management prevents customers from being hit with late payment fees, and if managed well, early payment discounts can be offered to encourage faster payment turnaround times.
We always, always recommend prompt invoice processing; there is no benefit to delaying invoicing, as things get forgotten or missed altogether.
This means you must have robust payment processes in place to help your credit control team manage all accounting instances and scenarios.
Automating specific areas of your accounting, such as invoicing, can help you to improve efficiency, ensure on-time payments, and streamline workflows.
If you’re still building your credit control processes and you’re looking for additional support with the successful collection of outstanding invoices and late payments, speak to a member of our team today. We’d be happy to help.