Create invoices

Applies to:     Office Accounting Express, Office Accounting Professional

An invoice is a financial document that records a sale. Invoices are posted to the appropriate nominal accounts as soon as they are saved.

sample invoice
Sample invoice

The Invoice form is divided into several parts:

  • The toolbar contains the most common tasks you can perform with an invoice. These can also be found in the respective menus (File, Edit, View, Actions and Help).

  • The top of the invoice contains the date and the customer information as well as the terms for the invoice.

  • The products and services section contains the details of the invoice, which is what you are offering the customer and at what price. An invoice must contain at least one line. Each line can contain a specific product or service with a quantity, an amount that will be posted directly to a nominal account, a comment or a VAT line.

  • The bottom of the invoice allows you to add an internal memo or document links, a reference to the customer, VAT and price level information as well as totals.

There are several items to note about an invoice:

  • Similar to other customer documents, the customer information is automatically copied to the invoice when the customer is selected, but the information may be changed on the invoice itself. When you save the invoice, you are asked if you also want to update the Customer form.

  • When the invoice is saved, it appears in the customer financial history and the Invoice List.

  • An invoice must contain a customer and one or more lines with products or services.

  • You change the line type by clicking the icon at the left side of the line. When you click the icon, a drop-down list appears that allows you to select Product or Service, Comment, VAT or Account.

    item types

  • The unit price on each line can be changed if desired. This does not change the underlying product or service.

  • Discounts are specified per line and can be specified either as a percentage (default) or as an amount in pounds sterling (GBP) (by typing £ before the amount).

  • An invoice may be created from a blank template or from a quote or sales order.

  • The payment terms define the due date and any early payment discounts on the customer payment as well as the VAT amounts on the invoice.

  • After an invoice is saved, all financially relevant fields become read-only and cannot be modified. However, you can click the Edit button, which voids the old invoice and creates an identical new invoice for editing. This preserves the audit trail of the financial transactions.

  • When an invoice is saved, it is posted, and the quantity of each stock product on the invoice is deducted from the stock on hand. (For more information, see Invoice postings later in this topic.)

  • An invoice cannot be deleted, but may be voided (by selecting Void on the Actions menu of the invoice) if the transaction for some reason is invalidated.

  • Invoices show up in the Forecast Cash Flow tool as part of the cash inflows.

Invoice postings

The invoice posts to the underlying nominal accounts. The invoice:

  • Debits the customer on the sales ledger account with the full invoice amount including VAT.

  • Credits the income account for the line total (net of VAT).

  • Credits the VAT on the sales account for the VAT amount.

For Microsoft Office Accounting Professional or Office Accounting Professional Plus only, if the invoice contains stock products, the invoice also:

  • Credits the stock asset account with the quantity and cost of the products. This is based on the first-in, first-out (FIFO) principle, explained in the Work with stock valuation topic.

  • Debits the cost of the sales account with the cost of the products.

All of these postings are done automatically. You only have to set up the products once, and Office Accounting does the rest.

The Audit Trail report, which is available on the Actions menu of the invoice, contains the postings for the invoice. The following example shows an invoice for £100.00 plus 17.50 percent VAT for a stock product:

sample audit trail report

  • The sales ledger is debited £100.00 for the sale and £17.50 for the VAT.

  • The income account (sales) is credited £100.00.

  • The VAT on sales is credited £17.50.

  • The stock asset account is credited £78.13 for the cost of the stock, and the stock on hand is reduced by one.

  • The cost of sales is debited £78.13 for the cost of the stock.

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