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What is an invoice? 

4 min read
Person working on revenue operations on a laptop

In the world of business, transactions are a daily occurrence. Whether you're providing a service or selling products, there's a crucial document that serves as the bridge between a sale and payment: the invoice. In this blog post, we'll delve into the world of invoices, understanding what they are, how they're used, and why they play a pivotal role in financial transactions. Plus, we'll explore how Conga Composer can streamline the invoicing process for your business. 


What is an Invoice and How is it Used? 

An invoice is a formal document issued by a seller to a buyer, requesting payment for goods or services provided. It serves as a crucial record of a transaction, detailing the terms and conditions agreed upon between the parties involved. In essence, an invoice is a legally binding document that outlines the financial obligations of the buyer. 


Is an Invoice a Bill or Receipt? 

While invoices, bills, and receipts are all related to financial transactions, they serve different purposes: 

  • Invoice: An invoice is a request for payment issued by the seller before payment is received. It details the products or services provided, their costs, and the terms of payment. 
  • Bill: A bill is a statement of charges for goods or services provided, usually sent by the seller or service provider after the delivery of goods or completion of services. It serves as a notice to the buyer of the amount owed. 
  • Receipt: A receipt is a document provided by the seller to the buyer after payment has been made. It acknowledges that payment has been received and often includes details of the transaction. 


What is the Purpose of an Invoice? 

The primary purpose of an invoice is to formalize the agreement between the seller and the buyer regarding the sale of goods or services. Invoices serve several essential functions: 

  1. Request for Payment: An invoice is a formal request for payment, specifying the amount due and the due date. 
  1.  Record Keeping: Invoices serve as an essential record of financial transactions, helping businesses keep track of sales, payments, and outstanding balances. 
  1.  Legal Document: Invoices are legally binding documents that can be used in case of disputes or legal issues. 
  1.  Tax Compliance: Invoices are often required for tax purposes, helping businesses report their revenue and expenses accurately. 
  1.  Professionalism: Sending well-structured invoices demonstrates professionalism and transparency in business dealings. 


What Should an Invoice Include? 

A comprehensive invoice typically includes the following elements: 

  • Header Information: This includes the seller's and buyer's contact details, such as names, addresses, phone numbers, and email addresses. 
  •  Invoice Number: A unique identifier for the invoice, making it easier to track and reference. 
  •  Invoice Date: The date when the invoice is issued. 
  •  Due Date: The date by which payment must be made. 
  •  Itemized List: A detailed list of the products or services provided, including descriptions, quantities, unit prices, and total amounts for each item. 
  •  Total Amount Due: The sum of all items on the invoice, representing the total amount the buyer must pay. 
  •  Payment Instructions: Details on how the payment should be made, including accepted payment methods and bank account information. 
  •  Terms and Conditions: Any specific terms and conditions related to the sale, such as return policies or late payment penalties. 


Does an Invoice Mean You Have to Pay? 

Receiving an invoice does not necessarily mean immediate payment is required. It serves as a request for payment within a specified timeframe. The buyer is expected to review the invoice, ensure its accuracy, and make payment according to the agreed-upon terms. Failure to do so may result in late fees or other consequences, as specified in the terms and conditions. 


When Should You Send an Invoice? 

Invoicing timing can vary depending on the nature of the business and the agreement with the buyer. Generally, invoices are sent: 

- Upon Completion of Services: Service providers often send invoices after completing the agreed-upon services. 

- Upon Shipment of Goods: Sellers typically send invoices when goods are shipped or delivered to the buyer. 

- On a Recurring Basis: Some businesses send invoices on a regular schedule, such as monthly or annually, for subscription services or ongoing contracts. 

- In Advance: In some cases, invoices are sent in advance, such as for retainer fees or prepayment for goods or services. 


How to Create an Invoice with Conga Composer 

Creating invoices manually can be time-consuming and prone to errors. Conga Composer offers a streamlined solution to simplify and automate the invoice generation process. Here's how: 

  • Create a template in Conga Composer: This Word document template should encompass all the information you want to provide to your customer, as mentioned above. 
  • Create merge fields: Remember all those details we mentioned for your invoice, such as names, addresses, and payment amounts? These will become merge fields that you insert into your template, essentially designated spaces for specific data for each customer who receives an invoice. 
  • Link merge fields to your data source of choice: All these merge fields can retrieve data from your CRM, ERP, or system of record of choice. Need to extract data from Salesforce to populate your invoices? No problem. What about Microsoft Dynamics? We've got that covered too. Or do you have a custom-built system? We can work with that as well. 
  • Send the invoice: With Conga Composer, you can automate the sending of your invoices. Send them via batch processing or schedule time-based triggers to deliver invoices to your customers. You can even embed download buttons on your websites or applications. Conga Composer offers flexibility, allowing you to tailor the sending options to meet your customers' needs."   

Conga Composer is a powerful document generation tool that integrates seamlessly with your existing systems, such as Salesforce. It allows you to create customized invoices with ease, pulling in data from your CRM, and applying templates that match your brand identity. Say goodbye to manual data entry and formatting hassles, and start generating professional invoices efficiently. 


Invoices are the lifeblood of financial transactions in the business world. They serve as formal requests for payment, crucial records of transactions, and legally binding documents. Understanding what an invoice is, its purpose, and how to create one efficiently is essential for any business. Conga Composer offers a smart solution to streamline your invoicing process, making it easier than ever to manage your financial transactions. Explore the benefits of Conga Composer today and elevate your invoicing game to new heights. 

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