Invoices and receipts examples: six everyday situations

None of the invoices below is real. The figures are placeholders in brackets, the businesses are invented, and the customers do not exist. What is real is the situation each one describes, and the one line on the document that decided whether the money arrived on time.

Six situations, each a small mess that most businesses meet within their first year of sending invoices. These invoices and receipts examples show the one line that fixes each one.

What to take away

1. Eight of ten delivered

You agreed to supply ten units. Eight arrived; two are back-ordered. The customer's accounts team will not pay an invoice for ten when their goods-in record says eight.

Description                              Qty   Unit    Amount
[Product], delivered [date],
 delivery note [number]                    8  [x.xx]   [x.xx]
[Product], 2 units back-ordered,
 expected [date]: not invoiced             0    -         -

The zero-quantity line looks odd and is the reason this invoice gets paid. It shows the approver that you know two are missing, that you are not charging for them, and when to expect them. The delivery note number gives goods-in something to match. The two remaining units go on a second invoice when they ship, referencing this one.

2. One transfer, three invoices

A customer pays a round figure that covers two invoices in full and part of a third. Your bookkeeper sees one bank line. Theirs sees three invoices and one payment. Neither can close the month until the two records agree.

RECEIPT [number]        Received [date]        [x.xx] [currency]

Applied to
  INV-[a]  dated [date]   settled in full             [x.xx]
  INV-[b]  dated [date]   settled in full             [x.xx]
  INV-[c]  dated [date]   part payment                [x.xx]
           remaining on INV-[c]                       [x.xx]

Send this without being asked. The customer's bookkeeper can allocate the payment in a minute, and your next statement will match theirs. Without it, someone on their side guesses which invoice was short-paid, guesses wrong, and your reminder for the wrong invoice starts an argument nobody wanted.

3. The line they dispute

A customer accepts four of five lines and challenges one. The temptation is to reopen the invoice, delete the line, and resend it as the same number. Do not. The customer now holds two documents with one number and different totals, and so do you.

Instead, two documents:

CREDIT NOTE [number]   against INV-[n]
  [Disputed line, quoted exactly as invoiced]        [-x.xx]
  Reason: line withdrawn pending agreement on [issue]

Then, once the point is settled:
INVOICE [new number]
  [The line at the agreed figure, or the agreed
   replacement], referencing INV-[n] and CN-[number]  [x.xx]

The original invoice stays in the file untouched. The customer can pay the four undisputed lines immediately, because the credit note has reduced the open balance to exactly that amount. The argument is confined to one new document instead of holding the whole payment hostage.

4. Drawing down a retainer

A client paid for a block of hours in advance. Each month you invoice against it. The failure is a monthly invoice that shows the hours used and nothing else, so the client cannot see what remains and eventually disputes the invoice that takes the balance below zero.

Retainer statement, period [month]
  Balance brought forward                    [n] hours
  Used this period (detail below)            [n] hours
  Balance carried forward                    [n] hours

Description                                       Amount
Retainer drawdown, [month]: [n] hours at the
 agreed rate, see attached time record             [x.xx]
Hours beyond retainer, [n] at [rate],
 as agreed on [date]                               [x.xx]

The three-line statement at the top is the whole point. When the carried-forward balance reaches zero, the client has watched it happen and the overage line is expected rather than a surprise. The time record goes in an attachment, not on the invoice face.

5. Billing across a border

Your customer is in another country. Two things go wrong: the currency is ambiguous, and their bank deducts a fee so the amount arriving is short.

Currency: [ISO code], stated once in the header and
          again beside the total

Total due                        [x.xx] [code]
Please instruct your bank to pay in full so that
[x.xx] [code] is received; bank charges are for the
payer's account, as agreed on [date].

Which taxes apply to a cross-border sale, and how they must be shown, is not something a template can answer. It depends on both countries, what you sell, and how you are registered. For sales into the European Union, the particulars an invoice must carry come from Council Directive 2006/112/EC, the VAT Directive, set out in the EU's published VAT invoicing requirements. In the United States, the federal rules on records and reporting come from the IRS.

Ask your accountant before the first such invoice goes out, and ask the customer's accounts team what their system needs. The currency line and the bank-charge sentence, however, are yours to get right, and they are the two lines most often missing.

6. A refund after payment

The customer paid in full, then returned part of the order. Three documents, in order, or the file never reconciles.

REFUND CONFIRMATION [number]
Settles credit note  CN-[n] against INV-[n]
Amount refunded      [x.xx] [currency]
Sent on              [date] by [method], reference [ref]
Balance on account   [x.xx]  (usually zero)

What the six have in common

The same discipline runs through the quote examples on this site: the load-bearing line is short, specific, and written before anyone is annoyed. The covering message that carries the invoice is an ordinary business letter, and it should repeat the number, the total, and the due date in case the attachment is never opened.

Turning these into your own

Look at the last three invoices that were paid late or paid wrong, and match each to one of the six. Add that document, or that line, to your standard set. Then use it on every invoice, including the small ones, because a practice applied only sometimes is a practice the customer can claim you dropped.

The document layouts are in the invoices and receipts overview; the figures you record from them feed the revenue line of the profit and loss form, which is why unapplied receipts and edited invoices appear as unexplained differences.

Common questions