Different types of invoices
► Standard invoice
A basic format for an invoice that includes all the basic information and can be used for different business transactions by multiple industries.
Use: very common
► Commercial invoice
Special invoice designed for foreign trade such as a shipment of goods from one country to the other. It contains contact details of the seller and buyer, items sold, cost of items and tax payable. It also has special attributes such as carrier identification number, country of origin, harmonised code for each items and a declaration that the invoice is authentic.
Use: less common, for customs declaration when a product is crossing international borders
► Progress invoice
Invoice sent from time to time to show the progress of a large project and quote an amount to be paid because the company has to pay the employees working for them during the works.
Use: commonly for the construction industry for works that extend over a long period and are also very expensive (e.g. constructing a house)
Special kind of invoice preferred by service professionals who charge based on time and typically mention time instead of product.
Use: for service-driven intellectual companies (consultancy firms) who offer services based on time
► Recurring invoice
These are invoices with a fixed rate that are usually delivered at the end of each month.
Use: typically used in the rental industry (e.g. for tools, space)
► Pro forma invoice, quotation, quote or estimate
Invoice that gives an idea to the buyer abouts the cost of products and services and can be typically used as a commitment by the seller to deliver certain goods or services at the estimated price. It can also be an advance payment against the estimated project amount.
► Value-based billing
Billing based on the services provided to the client and the value of those services. The invoice amount depends on the amount of work delivered to the customer rather than the time it takes to complete a project.
Use: when the value of a service or product can be determined beforehand
► Fixed-bid billing
Billing best suited for projects with well-defined requirements to quote a fixed price for a project.
Use: small businesses or freelancing services
► Time-based billing
Billing based on an hourly rate and the amount of hours worked on a project. The golden rule of time-based billing is not to undercharge for your services.
Use: creative jobs in which you’re not sure how much time it takes to complete a project