What Is An Invoice?

January 14, 2021

An invoice is a document that describes the details of a commercial transaction, such as the product or service type, its quantity, the price, the amount of tax due (such as VAT or GST), the seller’s business details, the date, and more. Once an order is completed, the seller or supplier needs to issue an invoice. It is also used by B2B customers to reclaim any indirect taxes (VAT, GST, etc.) incurred on purchases.

If an invoice contains errors, or if details of the transaction have changed after issuing it (e.g., in case of post-purchase price adjustments or refunds), the supplier needs to issue an additional document, called a credit note. 

Both invoices and credit notes must contain specific information mandated by taxation and invoicing rules and regulations in each country. This makes issuing locally compliant invoices across different countries potentially challenging. Find out which information a VAT invoice must contain. 

Electronic Invoices

In the past, invoices were usually printed on paper. 

However, over the past decade, and with the development of e-commerce, sellers now often issue electronic invoices. The function of electronic invoices is exactly the same: to document the transaction’s details. They contain exactly the same information as paper invoices; the only difference is that they’re issued in an electronic form, as a PDF, HTML, XML file, for example.

Most countries allow the issuance of invoices in an electronic format and recognize the validity of electronic invoices, but there are some countries where paper invoices are still required.


An Automated Solution For Electronic Invoices


Fonoa Invoicing automatically generates locally compliant tax invoices for your transactions, regardless of the country. Create and send your invoices in your customers’ language, and customize them as needed.

Need help with invoicing? Reach out to us, and we will help you automate invoicing.