Invoice Definition – What is Invoice?

Accounting Glossary 

Invoice definition including break down of areas in the definition. Analyzing the definition of key term often provides more insight about concepts. Invoice can be defined as: Itemized record of goods prepared by the vendor that lists the customer’s name, items sold, sales price, and terms of sale. An invoice is a documents to record the sale and provide a bill to the customer. An invoice is often used when work is done before cash has been received, an invoice often being generated and mailed to the customer as a form of bill. The invoice will usually include an ordered invoice number, name of customer, description of services and goods, cost of services and goods to the customer, and payment terms. The invoice is often used as the point in time that a sale is recorded. An entry being recorded for a debit to AR and a credit to revenue for the invoice amount. In a perpetual inventory system, the invoice will also trigger a debit to cost of goods sold and a credit to inventory, although this amount will not be on the invoice itself.