How to Raise/submit an Invoice
To get payment from client/project, a Contractor/Vendor should prepare and submit a complete and clear invoice. Payment depends upon the perfection of the Invoice to be submitted along with necessary attachment.
Design of an Invoice depends upon individual/company who prepares them in-line with the guidelines of client and relevant norms for applicable taxes, but regardless of this and its physical appearance, every invoice should have all information required to help client to understand and process the invoice efficiently. If key details are missing or presented poorly the client’s job become harder and your invoice may also ends up last on the client’s list of outstanding bills to pay.
Following are the important steps to submit an Invoice:
1. Time to raise the invoice: Time of invoicing depends upon the nature of the job done i.e. whether it is against supply of goods or providing services.
(i) In case of supply of goods, taxable invoice may be issued at any of the following stage.
a. Before removal of goods from warehouse/stockist
b. After removal of goods from warehouse/stockist
c. Delivery of goods to the Client.
(ii) In case of services/execution, taxable invoice may be issued at any of the following stage.
a. Before providing the service/execution
b. After completion/provision of the service & within 30 days.
2. Documents required with Invoice: It is necessary to assess the requirement of the documents by the client (in line with the contract issued). Most of the contracts have clear information about requirement of documents along with the invoices. Following are the important documents required along with invoice as per the nature of job.
(i) Supply of Goods: For supply of goods, following documents should be submitted with the invoice.
a. Original consignee copy of Lorry Receipt (LR/Challan).
b. Copy of Material dispatch Clearance certificate issued by client.
c. Copy of test certificate of materials.
d. Warranty certificate
e. Proof of dispatch/ delivery of materials (POD).
(ii) Service/Execution: For services/execution, following are documents should be submitted with the invoice.
a. Work measurement & certification of work done by respective Officer/Engineer In charge.
b. Work inspection report conforming the quality of work by the authorised person of client.
c. All other protocol as per the guidelines in the work order.
(iii) Authorised Person for submission of invoice: There is a protocol and specific guidelines for submission of invoice in any organization. Before submission of invoice, contractor has to ensure that the invoice is submitted to the authorised person of his/her Client. Contractor has to get receipt of the invoice with seal, signature and date by authorised person of the client.
3. Essential Components of Invoice: Every Invoice should include following essential components:
a. Professional Header: It contents the Business name, mailing address, phone number, email address, and website.
b. Client Contact Information: It contents Invoice recipient name, address, and phone number.
c. Invoice Number and Date: It contents Invoice number, date, payment due date and preferred payment method i.e. how the invoice should be paid: bank details/cheque issuing details.
d. Itemized Breakdown: It includes description of services/products, date of performance/purchase, quantity provided (hours/items), rate (per hour/item), and financial details (row totals, subtotal, taxes and fees, and grand total).
e. Terms and Conditions: Miscellaneous information such as deducible advance, invoice discounts, days to pay, any other recoveries and additional fees.