An invoice is a commercial document issued by seller to buyer that enlists the summary of the transaction i.e. quantity, unit price, total of complete purchase, item descriptions, settlement terms, dates, etc. This Ofbiz component supports various Invoice(s) for Accounts payable and Accounts receivable. Let’s find out what are those invoice(s) types are.
Let’s start with AR component. AR supports Sales Invoice(s), Purchase return Invoice(s) and Interest Invoices(s).
1) Sales Invoice(s): The Sales Invoice is where everything comes together. A customer is chosen from the database, or entered as a new customer. Merchandise its detailed by entering non-inventory items or selecting merchandise from inventory. Each Sales invoice may also have a memo attached (e.g., for delivery instructions or other particulars). Once an Invoice is paid it will Debit Accounts Receivable.
2) Purchase Return Invoice(s): In the event of a purchase return, goods are removed from the warehouse to return the goods to the supplier. These will be created for mapping the entries.
3) Interest Invoice(s): Invoices are used to charge clients for overdue invoices.
On the other side of this accounting function, the Ofbiz AP Component supports purchase Invoice(s), customer return Invoice(s), payroll and commission invoice(s).
4) Purchase Invoice(s) : When an invoice is received from one of your regular suppliers, this should be entered in the Ofbiz System as a purchase invoice. Once an Invoice is paid it will Credit Accounts Payable.
5) Customer Return Invoice(s): The reasons a customer may decide to return an item are numerous, and it can be possible only on condition that the terms between our Company and the Customers are discussed, and the return is allowed.
6) Payroll Invoice(s): It could be referred to as ‘The Sum’ total of all compensation that a business must pay to its employees for a set period of time, or by a given date. It is a major expense for most businesses and is almost always deductible as such.
7) Commission Invoice(s): A Commission Invoice is a form of payment to an agent for services rendered.
In the next tutorial I will walk you through various Invoice statuses.