An invoice is a commercial document that shows the details of a sales transaction. Once any service has been completed or an order has been fulfilled, the seller or supplier needs to issue an invoice.
Throughout the world, invoices are used as evidence for tax purposes. Business customers also use invoices to reclaim indirect taxes (e.g., VAT, GST) on their business transactions.
If an invoice contains errors, or if the transaction details change after the invoice is issued, (e.g., post-purchase price adjustment like discounts and refunds) then you need to issue an additional document: a credit note.
Issuing locally-compliant invoices and credit notes can be complicated. These documents have specific requirements and must contain specific information, as mandated by local rules and regulations. These invoices are ready to be shared with your customers in their language and in your desired format.
There are a couple of roles in the process of creating of invoice:
An entity that is providing the service or selling goods.
A buying party in the transaction.
An entity that is creating an invoice. If you are doing 3rd party invoicing or self-invoicing, use this field to specify who is creating the invoice. Otherwise, you don’t have to use this field.