Invoicing instructions: Overview, definition, and example
What are invoicing instructions?
Invoicing instructions are guidelines or directions provided by a client or company to ensure that invoices are generated, submitted, and processed according to specific requirements. These instructions typically include details about the required format, necessary documentation, payment terms, recipient information, and how the invoice should be delivered (e.g., electronically, by mail). Invoicing instructions help standardize the billing process, ensuring timely and accurate payment and compliance with company policies or contractual agreements.
For example, a company may provide invoicing instructions that specify that all invoices must include a purchase order number, be submitted within 30 days of service delivery, and be emailed to a designated accounts payable department.
Why are invoicing instructions important?
Invoicing instructions are important because they ensure that invoices are clear, consistent, and meet the requirements of the client or paying organization. Clear invoicing instructions help avoid delays, prevent misunderstandings, and reduce the risk of payment disputes. They streamline the accounts payable or receivable process by providing a structured framework for how billing should be handled.
For businesses, ensuring compliance with invoicing instructions is essential for timely payments and maintaining good relationships with clients or vendors. For clients or customers, following invoicing instructions ensures that the invoice can be processed without unnecessary delays or complications.
Understanding invoicing instructions through an example
A freelancer providing graphic design services signs a contract with a client that includes detailed invoicing instructions. The instructions state that invoices should be sent by email to the accounts payable department, include the contract number, list the services provided, and specify the agreed-upon payment terms (e.g., net 30 days). By following these invoicing instructions, the freelancer ensures that their invoice is processed correctly and on time.
In another example, a supplier delivering products to a retailer is provided with invoicing instructions that require the inclusion of specific tax codes, discount information, and product codes in the invoice. Following these instructions ensures that the retailer can process the invoice promptly and accurately, avoiding any delays in payment.
An example of invoicing instructions clause
Here’s how invoicing instructions might appear in a contract or agreement:
“The Supplier shall submit all invoices to the Purchaser by email to [email address] within 30 days of service completion. Each invoice must include the following details: purchase order number, itemized list of goods or services, unit prices, total amount due, and applicable tax rates. Payments will be made according to the agreed payment terms of net 30 days from the invoice date.”
Conclusion
Invoicing instructions are crucial for ensuring that invoices are processed accurately, efficiently, and in line with the requirements of the client or organization. By clearly outlining the necessary details and formats, invoicing instructions help prevent delays, confusion, and disputes, facilitating smoother transactions. For both suppliers and clients, adhering to invoicing instructions is essential for maintaining a healthy business relationship and ensuring prompt and accurate payments.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.