An invoice plays a big role in a business. It sets out the cost of the products purchased or the services rendered to the buyer, and it acts as a legal record for both buyer and seller so there is no discrepancy later.
For a long time people relied on manual invoicing — building the format themselves, or asking someone experienced to do it for them. Manual invoicing is time-consuming, and the business can only get on with other things once it is done. It also leads to missing information, and that costs money.
That is no longer necessary. Invoicing software caters to businesses of every size — but when you choose it, it helps to know which types of invoice exist. Here they are in detail, so you can work out which suit your business.
1. Standard invoice
The most common type in use. The business generates it and submits it to the client.
The format is flexible, so it suits small businesses easily and fits most industries and billing cycles. A standard invoice typically includes:
- Contact information for the business
- Business name
- Contact information for the client
- Client name
- Invoice number
- The amount the client must pay
See create an invoice.
2. Debit invoice
Also known as a debit memo. The business issues it to tell the client the amount they owe has increased. It is useful for small businesses and freelancers making a slight adjustment to an existing bill.
Example: you provided additional services after the original invoice went out and need to account for them. See what is a debit note.
3. Credit invoice
Also known as a credit memo. The business issues it to apply a discount or a refund, or to correct an error on a previous invoice. It carries a negative total.
Example: if you are offering a €50 discount, it appears as −€50 on the credit invoice. See credit notes.
4. Mixed invoice
A combination of credit and debit charges on one document. The total is worked out across the positive and negative amounts, so the final figure can end up either way.
That is useful when you need to increase the charge for one service while offering a discount or refund on another — everything is on a single invoice instead of several.
5. Timesheet invoice
Used where billing is based on the number of hours worked and a standard rate of pay. Most often used by contract workers.
Typical users include lawyers, business consultants, creative agencies and psychologists — see time tracking.
6. Commercial invoice
Used when goods are sold to customers internationally. It carries what customs needs to assess duty on a cross-border sale, which usually means:
- Shipment quantity
- Total value
- Description of the goods
- Weight or volume
- Packaging format
7. Expense report
Used when an employee asks their employer to reimburse business-related costs.
Example: someone travels to complete work for the business, and the expenses from the trip are covered by the company. They submit the details, the business approves it, and the amount is paid back. See receipt registration.
8. Interim invoice
Used for billing on large projects. Client and business agree the payment terms and cycle before the invoice is created; as each stage completes, the business submits an interim invoice and collects payment.
This helps a small business manage cash flow, and makes it possible to work on longer projects without financing them yourself.
9. Proforma invoice
An estimated invoice sent to the client before the work starts.
Example: a client is considering digital marketing services from an agency. Before anything is finalised, the agency submits a document showing the amounts for the services on offer, so the client can judge whether it fits their budget. Once both sides have agreed the pricing, the project begins.
See when do I need a proforma invoice.
10. Sales invoice
Used when the business requests payment from the buyer for a product or service. It usually carries:
- Seller information
- Delivery date
- Buyer address
- Payment terms
- Items and their rates
- Total price
Payment links and bank details go on it too, so that once payment is made the invoice stands as a legal record of the transaction.
11. Digital invoice
An invoice generated with software rather than by hand — seller details, quantity, price, item name, total to be paid, and so on.
Digital invoices can be created in real time, and they are easy to customise.
12. Final invoice
Sent to the client after the project completes, requesting the amount due. It covers the job from start to finish.
Often the business has already received part of the money before starting, and that is shown on the invoice, with the remainder payable at the end. A final invoice usually includes the invoice number, the total cost of the project, the due date, payment methods and details of the services provided.
13. Recurring invoice
For businesses charging clients the same amount periodically for an ongoing service.
Common in IT, where a fixed monthly amount is billed to each client, and among freelancers on retainer. See recurring invoices.
14. Past due invoice
Used when the client has not paid by the due date listed on the final invoice. The business generates it and sends it directly to the client, carrying the same details as the final invoice.
See create a payment reminder.
Choosing the right ones
Those are the invoice types worth knowing. Choose according to what your business actually needs — the features of each should make it reasonably clear which fit.
Invoice Office covers the types most businesses need, keeps the cost record simple, and includes a range of templates to work from.