# Invoice


An invoice is the seller's request for payment. It lists what was sold, quantities, prices, taxes, the total due, and the payment terms, and it references the buyer's purchase order. The buyer matches it against the PO and the goods received before paying. In EDI the invoice is the 810 transaction.

## What an invoice includes

Buyers reject invoices that are missing fields their accounts payable team needs to match and pay. A complete B2B invoice carries:

- Invoice number, unique and sequential
- Invoice date and payment due date
- Seller and buyer legal names, addresses, and tax IDs where required
- Buyer's PO number, and the ship-to or store number
- Line items: item number or GTIN, description, quantity, unit of measure, unit price, line total
- Freight, discounts, allowances, and taxes as separate lines
- Total amount due and currency
- Payment terms, such as Net 30 or 2% 10 Net 30, and remit-to details

## Invoice vs purchase order

The purchase order and the invoice describe the same deal from opposite ends of it.

|  | Purchase order | Invoice |
| --- | --- | --- |
| Issued by | Buyer | Seller |
| Sent | Before fulfillment | After shipment or delivery |
| Purpose | Offer to buy | Request for payment |
| Accounting effect | None until received | Accounts receivable for the seller, accounts payable for the buyer |
| EDI transaction | 850 | 810 |

## Types of invoices

Most B2B billing uses a standard invoice, but other types cover specific situations.

- Standard invoice: bills for goods or services delivered.
- Proforma invoice: a preliminary quote-style invoice sent before delivery, not a demand for payment.
- Commercial invoice: states value for customs on international shipments.
- Credit memo: reduces what the buyer owes, for returns, shortages, or pricing errors.
- Debit memo: increases what the buyer owes, for undercharges or added fees.
- Recurring invoice: bills the same amount on a schedule.
- Progress invoice: bills part of a large order or project as milestones are met.

## Why invoices get rejected

Most rejected invoices fail the buyer's match, not the math. The usual causes are a missing or wrong PO number, a price that differs from the PO, a quantity that differs from what the dock received, or a unit of measure mismatch such as cases billed against eaches ordered. Retail buyers often charge a fee on top of the delay. Invoicing straight from the order and shipment data, instead of re-keying it, removes most of these errors.

## Invoices in EDI

The EDI 810 carries the invoice. The BIG segment holds the invoice date, invoice number, PO date, and PO number. IT1 segments carry each line, and the TDS segment carries the total. Grocery retailers often use the 880 instead.

## FAQ

### What is an invoice?

An invoice is a seller's request for payment that lists the goods or services provided, prices, taxes, the total due, and payment terms.

### What is the difference between an invoice and a receipt?

An invoice asks for payment. A receipt confirms that payment was made.

### What is the difference between an invoice and a bill?

They are the same document seen from two sides. The seller sends an invoice; the buyer records it as a bill to pay.

### Does an invoice need a PO number?

For most B2B buyers, yes. Accounts payable matches the invoice to the PO by that number, and invoices without it are often rejected or delayed.

## Sources

- [X12 transaction set index](https://x12.org/codes)