What is an outgoing invoice

An outgoing invoice is a bill issued by a business to its clients for goods or services provided on credit terms.

What is an outgoing invoice

An outgoing invoice is a bill issued by a business to its clients for goods or services provided on credit terms.

It serves as an official record of the transaction that requires settlement within a stipulated payment period. Should the client fail to meet the payment deadline, the business has recourse to issue payment reminders or, in adverse situations, resort to a debt collection service.

What is the difference between an outgoing invoice and an incoming invoice?

There is a straightforward distinction within financial vernacular: an ‘outgoing invoice’ pertains to bills dispatched by your company to its customers, while an ‘incoming invoice’ refers to those your company receives, typically for goods or services purchased from vendors. Commonly, the term ‘invoice’ alone is used interchangeably, encompassing both outgoing and incoming bills.

How are outgoing invoices recorded?

Businesses mandated to maintain formal accounts must accurately record all outgoing invoices. The Goods and Services Tax (GST) detailed on an outgoing invoice is categorised as ‘output GST’ for accounting purposes. The invoice’s date establishes its association with the appropriate GST reporting period.

Upon receipt of payment for an invoice, you can then categorise the invoice as settled on the designated date, concurrently updating the financial records.