An invoice is an essential document that serves to document a transaction in business. It typically records the date and quantities of goods sold, the items’ corresponding prices, the buyer and seller's names, and the payment terms. An invoice can be used as a physical or digital record of purchase, and while it is typically associated with purchases, it can be issued in other contexts such as services performed, rental of property, and other exchanges.

Invoices come in various forms and formats, ranging from a simple paper receipt to complicated multi-page documents, depending on the nature of the transaction. Most forms of invoice nowadays come with a unique “invoice number,” typically a hexadecimal code, which is used in accounting systems to allow for future review and auditing of the document. The invoice includes information on the total amount of money due, the payment terms, applicable taxes, and other discounts or allowances that may be applicable.

Invoices are a critical element of accounting and internal controls. They must be approved by the responsible management personnel to ensure accuracy and legitimacy. In the event of a dispute, invoices provide convincing evidence regarding the details of a transaction and associated costs. Not only can it serve as a receipt of payment, but it can also provide evidence on how to handle any issues that may arise during the transaction, such as late or missed payments, or late shipments.

Invoices are a great way to keep track of the financial aspects of a business, as they provide a comprehensive record of the purchase and sale of goods, services, and other assets. By having an accurate and up-to-date registry of transactions, companies can easily review their past financial decisions and trends, thus allowing them to make better-informed decisions in the future.