All You Need to Survive Supplier Invoices
With all the invoices that your company needs to handle, how can you follow all these different transactions between suppliers and clients?
Understanding what a supplier invoice is and why it’s important for day-to-day work operations is key to successfully exchanging with your suppliers and keeping your business on track.
No need to fear, Appvizer will give you all the information you need to survive supplier invoices. We’ll cover everything from the primary components needed and how software can be used to make that process even easier for you, with examples along the way.
Shape up your supplier invoice skills
You probably already know what a basic invoice is, a supplier invoice luckily isn’t much different, more so just a different type.
Simply put, a supplier invoice is a document used to track the sale of goods and services between a seller and buyer. You might also see it called a vendor invoice in certain situations.
The supplier invoice goes into detail about the transactions between the vendor and your company when it comes to providing various things for you such as:
- IT services;
- Manual labor and production fees.
These documents list any goods and services provided, breaking them up into an itemized list that lists the precise amounts owed for each item. This also includes any relevant taxes, fees, and any other miscellaneous notes and charges.
💡 Objective: show exactly what the supplier offered and what the receiving company must pay in return
In most cases, these invoices will be processed by your accounts payable department. In the case of smaller businesses, it may even be handled by the accounting department, a manager that handles finances, or even the owner of the business.
Who issues a supplier invoice?
As the name suggests, the responsibility of issuing a supplier invoice is placed on the supplier or vendor. In most business cases, this would be the company from which your business is purchasing goods and services.
In situations where your business would be supplying products or services to a client or customer, your organization would in turn provide them with a supplier invoice.
This allows you to request the payment which is then fulfilled by your client based on the billing date negotiated between the seller and the buyer.
The essential elements of a supplier invoice
Ensuring that you know the crucial components of supplier invoices helps your business understand future invoices, whether you’re on the receiving or sending end. You’ll most likely find the following elements:
- Unique invoice number: this number allows businesses to keep track of records and organize future or recurring invoices
- Initial invoice date: refers to the official date of the transaction and potentially the same date that the buyer is billed
- Payment due date: typically this will be 30 days after the initial invoice date but each transaction can have its own payment period
- Contact information for the seller and buyer: such as the business or clients name, address, phone number, email address, and possibly the department that is being billed
- Itemized list of goods and services: line by line, the products or services received are listed alongside the price for each one, followed by the total for all goods and services, including shipping fees, taxes, and other charges typically at the bottom of the invoice.
- Payment terms: these are negotiated between the buyer and seller, this could be through a line of credit, payment in advance, upon receipt of the invoice, etc.
Supplier invoice example
Take a look at this example to get a better idea of a typical template that could be used for a supplier invoice.
The importance of supplier invoices for businesses
So far it’s not too much trouble, just a document that tracks transactions between a seller and a buyer for supplied goods and services. Now, why is it so important for your business?
✅ A timely reminder
Your organization will make use of supplier invoices by using key information already on the document. The various dates (initial invoice, payment due, etc.) allow you to ensure that payments are sent out on time. Not only is this vital for receiving the expected products/services needed for effective business operations, but also to maintain a good relationship with your suppliers, which is always a plus.
✅ A record-keeping tool
Supplier invoices are critical parts of record-keeping for your financial or accounts payable department. By maintaining these invoices, you’ll be able to track all your outgoing payments, outstanding transactions, and transaction history with different suppliers.
✅ An opportunity for order verification
Invoicing allows account payable teams to verify that orders and transactions are properly completed. Beyond just keeping track of records, your business can ensure that there are no inconsistencies in the services given or products received.
✅ A potential branding tool for suppliers
If your company is the one supplying the merchandise or service, your supplier invoices could be considered a part of brand management. The quality, accuracy of the information, visual aspects, color schemes, and logo of your company are all factors that can improve the brand experience you give to customers. As you know, a good brand experience will make clients want to work with you again.
Managing supplier invoices with software
This isn’t your first rodeo, you know that invoices can come in many forms, from paper documents sent in the mail to emailed attachments. But did you know there are software solutions that offer invoice processing automation?
Invoicing software makes the entire process faster and more efficient. They can also help save costs, by standardizing the invoicing process. Clients and suppliers can easily check the status of invoices, pass them off for approval, and more while keeping centralized control of invoice history.
On top of that, your team can minimize human error by automating data and information input. This way, your team can assure accurate information for businesses and customers.
Now, you’ve got all the knowledge at your fingertips when it comes to the essentials of supplier invoices.
- The supplier invoice: a document that records transactions precisely between a supplier/vendor and a buyer
- Main elements: Dates, contact information, goods and services provided, and payment terms
- Importance: helps keep records, reminds businesses of upcoming payments, ensures accurate transactions, and is even a branding tool