Invoice glossary
Clear definitions of the invoicing and billing terms freelancers and small businesses run into — plus VAT/GST invoice requirements by country.
Invoicing terms
Proforma invoice
A preliminary, quote-like bill sent before delivery — not a demand for payment or a valid tax invoice.
Credit note
A document that reduces what a customer owes after an invoice — for returns, overcharges or corrections.
Debit note
A document that increases an amount owed or requests an adjustment — the counterpart to a credit note.
Purchase order (PO)
A buyer's document ordering goods/services at agreed quantities and prices, issued before the invoice.
Remittance advice
A note from the payer telling a supplier which invoices a payment covers.
Accounts receivable (AR)
Money customers owe a business for invoices issued but not yet paid — an asset.
Accounts payable (AP)
Money a business owes suppliers for bills received but not yet paid — a liability.
Net payment terms
"Net 30" and similar terms set how many days after the invoice date payment is due.
Late fee
A charge added to an invoice not paid by its due date — often ~1.5% per month or a flat amount.
Recurring invoice
An invoice sent automatically on a repeating schedule for ongoing services or subscriptions.
Retainer
An upfront payment that reserves a provider's time or services over a period.
Country requirements
UK VAT invoice requirements
The fields a full UK VAT invoice must show, per HMRC.
Australian tax invoice requirements
The seven things an Australian GST tax invoice must show (ATO), plus the rule for sales of $1,000+.
Canada GST/HST invoice requirements
The details a GST/HST invoice must show in Canada, which scale with the sale amount.