An invoice is the document a seller issues to a buyer demanding payment for goods or services supplied. A tax invoice additionally shows the VAT charged and must meet SARS's formatting requirements before the buyer can claim input VAT on it.
What it means
Issuing an invoice raises revenue and an accounts receivable for the seller; receiving one raises an expense or asset and an accounts payable for the buyer. The invoice date usually fixes when the transaction is recognised, regardless of when cash changes hands.
Where it fits in
Payroll itself is not invoiced - an employment relationship, not a trade one - but a business processing payroll still invoices its customers and is invoiced by suppliers, and those flows fund the wage bill.
Key rules
- Raised by the seller to demand payment for a supply.
- A tax invoice must show VAT separately to support an input claim.
- Drives revenue and a receivable for the seller, an expense/payable for the buyer.
- Invoice date generally fixes the period of recognition.
