To Invoice or Not - Essay Sample

Introduction

An invoice refers to a document that contains the financial component details of transactions of a business. An invoice entails the contact information and name of the seller and the buyer, the cost per product, the total due amount and a description of the goods and services rendered. Invoices also include due date and method preferred for payment and invoice number.

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I do not support the suggestion but instead, support the use of an invoice in a business or organization for the following valid arguments. An invoice aids a business or firm to get paid on time and in full amount. It is sometimes difficult to get paid without an appropriate invoice. Firms usually request a detailed invoice receipt before the disbursement of the payments. Terms of payment can assist a firm to collect receivables quickly (Salek, 34). For instance, a company might order payment to be due when receipt is received, within 30 days or 60 days receipt. The inclusion of a late policy will surely ensure payment in prompt. Receiving payments in time means the firm will manage to pay for its bills like electricity and payrolls. Other platforms like online invoicing help the concerned to efficiently and quickly receive services or goods' payment. For a fact, the majority of electronic invoices are completed by just a click of the button. The speed of payment can be accelerated by reducing the cycle billing time. Unlike the 30 traditional day's cycle, the cycle can be reduced to 15 days.

An invoice gives evidence that services and products are delivered thus establish a firm's right to be paid. In the case where a customer has not paid, the firm may use invoice and contract to demonstrate to a court of law legally that it deserves to be paid. In the same context, a firm may keep invoice and amount copies paid to vendors and contractors to identify that its contractual payment obligations are complete. Lawyers and accounts like comprehensive invoice discussions since the document include legal implications and numbers. The invoice in itself is not a legally binding agreement. However, the invoice has a tenuous standing legal which is the reason vendors demand signatures from customers or just another binding kind of acceptance before giving out an item. The accountability though works on both sides, the client and the vendor. The client may order the items and then refuse that he or she made the order which can be extremely expensive for the vendor (Vesela, 743).

Invoices give audit evidence for the company undergoing auditing services. Even if everything is done right, there will always be a probability that the company could experience IRS auditing. The IRS needs to make sure that the firm has adequately recorded and reported all income received during the financial year and they would have much confidence if the income is correctly and fully reported. If the invoices are correctly managed and kept, the firm will not have problems to prove that they are not hiding any income. At the ground of the firm, the auditor should gather appropriate and sufficient evidence to enable the support of the conclusion arrived at. Audit evidence entails information existing in the account books and other sources like purchase invoice and products received.

Conclusion

To conclude, an invoice is probably the vital document you render for your business. Apart from helping you get paid, invoice represents what the company is. It is the image and brand of the company, the narration about the company, the location, products or services offered and appearance. Invoice speaks for itself telling the world that the company is proud of its activities through the financial receipts delivered.

Works Cited

Salek, John G. Accounts receivable management best practices. John Wiley & Sons, (2005): 34-36.

Vesela, Lucie, and Miroslav Radimersky. "The development of electronic document exchange." Procedia Economics and Finance 12 (2014): 743-751.