What is invoicing?

What is invoicing actually? This term generally refers to the billing undertaken by a company after it has delivered goods to the customer or rendered the agreed service. Besides the creation of an invoice, the posting of the transaction to an appropriate debtor account is also an aspect of invoicing. All work that relates to billing is summarised under the term invoicing. This includes, for example, the creation of credit notes and the processing of bonus and rebate systems.


What is invoicing? - the word's origin


Within commercial activities, invoicing is part of receivables management, together with accounts receivable, the dunning procedure and debt collection. In combination, these activities ensure that a company gets paid for a service rendered.


What is invoicing? - the correct invoice

The central element of invoicing is a correct invoice that contains all legally required elements. An invoice is usually created and sent in written, but increasingly also in electronic form. An invoice is required for various reasons.

For effective invoicing, the invoice must list several important pieces of information. The name and address of the invoicing company and the service recipient must be mentioned. In addition, all services or goods delivered to the customer must be listed at their net price and the date of service must be noted. VAT amounts and the tax rate must be noted on the invoice, as well as the resulting gross amount. The invoice must contain information about the terms of payment, the date of the invoice, a unique invoice number and the company's tax number.


What is invoicing in the legal sense?

Legal requirements for invoicing can be found in commercial and tax law. The sales tax or VAT must be shown on the invoice. If this information is missing, the invoicing company cannot claim the VAT. Generally speaking, invoices are, similar to bank statements, merely receipts of payment transactions. In principle, they differ to delivery notes and dunning reminders, which have different effects before the law.


What is invoicing by a service provider?

Correct invoicing can be a complex process that requires a lot of attention. Many companies thus work with modern software or assign the task of invoicing to an external specialist. Service providers like Arvato infoscore offer their partners all services related to invoicing. These can range from the invoicing alone to the entire payment process. In the ​​billing & payment division, Arvato Financial Solutions offers fast and secure payment processing. This includes processing of service data, the actual billing, management of business accounts, subsequent payment processing and commercial dunning where necessary. The service provider undertakes these activities so that the company has more capacity available for its core competencies.