What are the different types of invoices?
Learn about the three major types of invoices and when to use them to properly bill your customers.
Invoices come in many shapes and sizes, and each one is designed for a specific purpose. Here are three of the most common types of invoices and what they’re used for.
Pro forma invoice.
A pro forma invoice is like a “pre” invoice. It’s not a demand for payment like a traditional invoice. It’s more like an estimate of how much products or services will cost once your work is finished.
This type of invoice is typically used for larger projects that contain several products or services. It gives customers an idea of the scope of the project, an itemized list of the costs, and the total amount that will be due once the project is complete.
An interim invoice is designed to break down the cost of a big project into smaller payments. Instead of sending one final invoice after the project concludes, you send several small ones as the project progresses.
You can benefit from using interim invoices to maintain cash flow during long projects when you’d otherwise have to wait until the project is finished to get paid. Interim invoices can also benefit your customers, helping them manage project costs by breaking them down into more manageable chunks.
A final invoice is exactly what it sounds like — it’s the official request for payment for a completed project, service, or product. It should include all the information necessary for customers to understand what they’re paying for and how to pay.
If there’s not a long project that requires an estimate or interim invoices, this is the type you’d use. For most businesses, this is the “standard invoice.”
Simplify the invoicing process.
Many businesses require signed approval before a job can be completed or billed. Accepting online signatures using software like Adobe Sign can simplify project approval by letting customers legally sign invoices remotely.