2017-05-11 13:35:52 Self Employed English There are nine types of invoices in accounts payable and accounts receivable procedures that you should be familiar with. https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/05/surf-shop-invoice-creation.jpg https://quickbooks.intuit.com/ca/resources/self-employed/9-different-invoice-types/ Self-Employed Invoice Types

Self-Employed Invoice Types

4 min read

If you’re a fledgling self-employed business owner who’s not sure how to create an invoice, you’re not alone. Fortunately, the process is easy. First, you can find an easy-to-use invoice template on the QuickBooks website. Next, enter your company information and the customer information for the party you’re billing. Finally, provide a price and description of the product and/or service provided, and send the entire invoice to the customer via email, postal service, or another preferred method of communication.

To get into more detail, there are nine types of invoices in accounts payable and accounts receivable procedures you should be familiar with. The following is a quick-start guide to get you familiar with the basics of how to create a specific invoice.

Standard Self-Employment Invoice

Suppliers issue standard self-employment invoices to buyers who purchase products or services. These invoices show the exact amount the buyer owes the supplier. If you’re a bookkeeping consultant billing a client for 40 hours of bookkeeping, you multiply your hourly rate by 40 and put this amount on the invoice. A standard invoice often shows a purchase number that identifies what the customer purchased, but this isn’t required. If you’re the one issuing the invoice, the dollar amount shown must be positive, because the buyer owes you money.

Credit Memo

A credit memo, also known as a credit invoice, shows an amount the seller owes the buyer. This number should always be negative. For example, if you’re issuing a client a refund for $100, you issue a credit memo for $-100.

You could use a credit memo to issue a refund for returned goods, to give a discount, to write off a billing amount, to issue a prepayment credit, to correct a billing error, or to resolve a pricing dispute.

Debit Memo

Sellers issue a debit memo, also known as a debit invoice, to a buyer to show an increase in the amount of debt the buyer owes the seller. If one of your clients has an account balance of $-1,000 credit and you want to charge them for an additional $100 service, you create a debit memo for $100 to reduce their credit to $-900. The memo expresses a debit amount as a positive number.

Banks often use a debit memo to charge fees to customer accounts, and companies sometimes use a debit memo to clear a small amount of money owed to a customer as a credit balance. Most businesses rarely use debit memos, but they can be useful if you need an incremental billing adjustment. For instance, if you underestimated the amount of hours when billing a project, you might issue a debit memo to adjust the amount owed. Alternately, many businesses choose to reissue the original standard invoice with the adjusted amount.

Mixed Invoice

Mixed invoices can have either positive or negative amounts when matched to purchase orders or invoices. For example, if you have a mixed invoice for $-500, you could match this to an invoice for $-500 or a purchase order for $500.

Prepayment Invoice

A prepayment invoice is a record of a down payment paid by a buyer to a seller. If you require a client to pay a $1,000 down payment on a consulting project, you use a prepayment invoice. When issued by a seller, a prepayment is a positive amount. A buyer may also submit a prepayment invoice as a negative amount.

Withholding Tax Invoice

A withholding tax invoice serves as a record for when you remit withholding tax to the tax authority. Use withholding tax invoices when you need to create records of payroll withholdings. You can create withholding tax invoices automatically or manually. When creating one automatically, decide in advance whether you want to create them during the invoice validation process or the payment process.

Self-Employment Invoice Expense Report

A self-employment expense report is an invoice you use to record an amount you owe an employee for business-related expenses they incur while doing work for you. If a sales representative has to travel to meet one of your company’s prospects, they bill their travel hours to you as an expense. You then can report these expenses on your business tax returns. Use expense reports whenever you or your employees pay for business-related expenses that you want to document for reimbursement or tax purposes.

PO Default Invoice

PO default invoices, also known as PO price adjustment invoices, record the difference in price between an original invoice and a new purchase order invoice. If you match an invoice to a purchase order and the supplier changes the unit price, you use a PO default invoice to adjust the unit price without changing the quantity billed.

Quick Match Invoice

Quick match invoices are used to save time when you have a large volume of invoices that don’t need to go through an extensive validation and default process. You can import them into your payables system after entry, after which you would apply validation and default procedures.

After you familiarize yourself with the basic types of invoices, identify the types most applicable to your company’s business procedures. Then, find sample invoice templates online and customize them to meet your needs. Invoice template files are available for both word processing and spreadsheet programs. QuickBooks Self-Employed app helps freelancers, contractors, and sole proprietors track manage your business on the go. Download the app.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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