What is an invoice?

An invoice is a document that provides a detailed account of the goods or services that have been provided by a seller to a buyer, along with the amounts that are due for payment. It typically includes important information such as the quantity and description of the products or services, pricing, payment terms, and the total amount owed. This document serves as a formal request for payment, establishing the expectation of payment from the buyer to the seller.

Invoices are essential for business transactions because they not only facilitate the payment process but also serve as a key record for both the buyer and the seller for accounting and tax purposes. This contrasts with other options like a legal binding contract, which outlines the terms of an agreement between parties, or a receipt for payment, which confirms that a payment has been made. A summary of company profits inherently relates to the financial performance of a business rather than to the specific transactions documented through an invoice.