An invoice, sometimes called a sales invoice, is a

document sent by a provider of a product or service to the

purchaser. The invoice establishes an obligation on the part of the
purchaser to pay, creating an account receivable. In other words,
the invoice is a written verification of the agreement between the
buyer and seller of the goods or services. 

Compare the Sales Invoice With

the Bill of Lading
When a buyer orders a seller’s product, there are several downstream
documents created from order placement through to shipment delivery.
These include a purchase order acknowledgement, packing slip, bill of lading
and invoice. Additionally, a pro forma invoice may be required for border
crossings. A certificate of analysis most likely will accompany material
destined for a laboratory. Each document has its own significance.

Financial vs. Legal Documentation

Comparison of the sales invoice with the bill of lading yields some similarities
as to content, but the primary difference is that the invoice is a financial
document. When an invoice is created it is posted to a customer’s account,
and once it is paid the invoice is cleared from the accounting system. A bill of
lading is not an accounting document; it is a legal document reflecting title to
goods as passing from the shipper to the buyer -- the consignee.
Invoicing for Financial Transactions

Because an invoice is a financial document it reflects the product name, the

quantity shipped, a price per unit of measure and a subtotal for the items
shipped. Additional line items for freight and tax also are noted on the invoice
with a final total due, and it reflects the payment terms and specifics as to
where payment should be sent. Usually at the bottom or on the back of the
invoice in fine print are the terms and conditions, which define the buyer’s
and seller’s responsibilities.

Shipping Confirmation

A bill of lading makes no reference to price or cost. It notes the product and
quantity shipped, the terms of shipment -- collect or prepaid -- and the trailer
or carrier vehicle number. The carrier’s driver reviews and signs the bill of
lading when he picks up the cargo from the seller’s warehouse or plant. Upon
delivery of the shipment, the buyer reviews the contents and signs the bill of
lading, confirming receipt. Any differences, such as damaged or missing
pieces, should be noted on the bill of lading before the carrier leaves the
buyer’s premises with the signed copy. A bill of lading might also note batch
numbers and the product’s country of origin.

Importance of All Documents

Though a bill of lading is not a financial document, it can have financial

implications. If a buyer is invoiced for six pieces but the bill of lading notes
only five arrived, it serves as backup documentation to short-pay the invoice
or to request a credit for the missing piece. Though one document reflects a
financial transaction and the other represents a logistical move, each
document is important in its own way and each is an integral part of the
order-to-cash process.

Billing procedure
June 06, 2018
The following billing procedure addresses three tasks in the billing
process, which involve collecting the information needed to construct
an invoice, creating invoices, and issuing them to customers.

Review Billing Information (Billing Clerk)

1. Access the daily shipping log in the computer system.

2. Scan the details for each shipment to ensure that it is ready for
billing. If so, flag the records as billable transactions.
3. Access the billing module and call up the preview screen for each
prospective invoice that is to be printed.
4. Verify that all prices have been approved by the order entry staff.
If not, match the listed prices against the official corporate price
list, and obtain approval for any variances from this list.
5. Add a freight charge, unless the order is flagged as being prepaid
or to be picked up by the customer.
6. Verify that the code for the customer's sales tax is correct, and
adjust it if necessary.

Print Invoice Batch (Billing Clerk)

1. Select the option in the billing software to print all flagged

invoices.
2. Position the company's official billing invoice form in the printer.
3. Run a test print to ensure that the billing forms are properly
positioned in the printer.
4. Print the entire invoice batch and verify that they printed
correctly.

Prepare and Send Invoices (Billing Clerk)

1. If the invoices are in multiple copies, burst the copies and retain
the designated copies.
2. Stuff the invoice version designated for customers into
envelopes.
3. Stamp "Address correction requested" on the billing envelopes.
4. Deliver the billing envelopes to the mail room for mailing.

File Invoice Copies (Billing Clerk)

1. File the retained invoice copies as needed, either by invoice

number or by customer name.
Understanding the billing process

The Billing process includes the following steps:

1.  Define who needs to be billed according to customer type and an optional
category.

2.  Decide for which billing products they are going to be billed and specify
how to calculate the charges. In Billing system setup, you define product
codes for customer billing.

3.  Specify when to generate renewal notices. iMIScalculates renewal notices

automatically by monitoring customers' Paid Thru (expiration) dates. Renewal
notices can be processed individually or in batches.

These are the topics related to these processes:

■    How to Bill: Performing Billing for Cash Dues (see Cash Dues Billing)

■    What to Bill: Defining Product Codes

■    Who to Bill: Setting up Customer Types

■    How to Present the Bill: Customizing the Renewal Notice

Formats (see Certification System Options window), Creating Billing Cycles

■    What to Bill to Whom: Creating Billing Cycles

■    How Much to Bill: Defining Special Pricing, Defining Prorating Rules

■    How to Set Up List Billing: Setting up List Billing

In the Sales journal, the Accounts Receivable account is debited, which

increases in value. The bookkeeper must also remember to make an entry

to the customer’s account records because the customer has not yet paid

for the item and will have to be billed for it. The transaction also increases

the value of the Sales account, which is credited.

At the end of the month, the bookkeeper can just total the Accounts

Receivable and Sales columns shown in the figure and post the totals to

those General Ledger accounts. She doesn’t need to post all the detail

because she can always refer back to the Sales journal. However, each

invoice noted in the Sales journal must be carefully recorded in each

customer’s account. Otherwise, the bookkeeper doesn’t know who and

how much to bill.

Cash receipts procedure

July 10, 2019

The process of receiving cash is highly regimented, because the task of

processing checks is loaded with controls. They are needed to ensure
that checks are recorded correctly, deposited promptly, and not stolen
or altered anywhere in the process. The procedure for check receipts
processing is outlined below:

Record checks and cash. When the daily mail delivery arrives, record
all received checks and cash on the mailroom check receipts list. For
each check received, state on the form the name of the paying party,
the check number and the amount paid. If the receipt was in cash, then
state the name of the paying party, check the “cash?” box, and the
amount paid. Once all line items have been completed, enter the grand
total in the “total receipts” field at the bottom of the form. Sign the
form and state the date on which the checks and cash were received.
Also, stamp “for deposit only” and the company’s bank account
number on every check received; this makes it more difficult for
someone to extract a check and deposit it into some other bank
account.

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Forward payments. Insert all checks, cash, and a copy of the mailroom
check receipt list into a secure interoffice mail pouch. Have it hand-
delivered to the cashier in the accounting department. The cashier
matches all items in the pouch to the mailroom check receipt list,
initials a copy of the list, and returns the copy by interoffice mail to the
mailroom. The mailroom staff then files the initialed copy by date.

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Apply cash to invoices. Access the accounting software, call up the

unpaid invoices for the relevant customer, and apply the cash to the
invoices indicated on the remittance advice that accompanies each
payment from the customer. If there is no indication of which invoice is
to be credited, record the payment either in a separate suspense
account, or as unapplied but within the account of the customer from
whom it came. In the latter situation, make a photocopy of the check
and retain it for application purposes at a later date, so that the check
can still be deposited on the current date.

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Record other cash (optional). Some cash or checks will occasionally

arrive that are not related to unpaid accounts receivable. For example,
there may be a prepayment by a customer, or the return of a deposit.
In these cases, record the receipt in the accounting system, along with
proper documentation of the reason for the payment.

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Deposit cash. Record all checks and cash on a deposit slip. Compare
the total on the deposit slip to the amount stated on the mailroom
check receipts list, and reconcile any differences. Then store the
checks and cash in a locked pouch and transport it to the bank.

Match to bank receipt. Upon receipt of the checks and cash, the bank
issues a receipt for it. Someone other than the cashier should compare
this receipt to the amount on the deposit slip and reconcile any
differences. It may be useful to staple the receipt to a copy of the
deposit slip and file the documents, as proof that the matching step
was completed.
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