An invoice is a document sent to a customer requesting payment for goods or services provided. It includes details of the transaction, payment terms and the amount due.
Invoicing is a fundamental business process and the starting point for accounts receivable management. A properly formatted invoice should include your business name and contact details, your GST/VAT registration number (if applicable), the customer's details, a unique invoice number, the date of issue, a clear description of goods or services, quantities and unit prices, any applicable GST/VAT amount, the total amount due and payment terms (including due date). Prompt invoicing improves cash flow - the sooner you send an invoice, the sooner you get paid. Consistent invoice numbering helps with record keeping and audit trails. In Xero, invoices are created in the Invoicing module and automatically update accounts receivable when sent. Payment terms should be clearly stated - common terms include payment on receipt, net 7 days, net 14 days or net 30 days. SortBooks supports the invoicing workflow by showing which incoming bank payments match outstanding invoices, and its AI CFO can tell you who owes you money.
SortBooks helps with the bookkeeping behind invoice by connecting to your Xero account and using AI to suggest the right account for transactions sitting in catch-all accounts, learning from your own past coding. Instead of fixing invoice by hand, you review each suggestion, approve it, and SortBooks updates Xero, GST code included. Then ask the AI CFO about your numbers, using live Xero data.
Accounts receivable (AR) is the money owed to your business by customers who have purchased goods or services on credit. It is a current asset on your balance sheet.
A tax invoice is a document that includes GST/VAT information and your registration number. It is required for customers to claim input tax credits on their purchases from you.
A credit note is a document issued by a seller to a buyer reducing the amount owed. It is used for returns, overcharges, damaged goods or agreed discounts after an invoice has been issued.
Payment terms specify when payment is expected from a customer. Common terms include payment on receipt, net 7, net 14 and net 30 (meaning payment due within that many days).
Cash flow is the movement of money in and out of your business. Positive cash flow means more money coming in than going out. It is often considered more important than profit for business survival.
Connect Xero, check the AI's suggestions and approve the changes. SortBooks updates Xero for you.