Last post, I talked about the accounting principles and the journal entry for an invoice.  Normally, in an ERP system, you do not get to see the entry. When you input the fields, the system automatically posts the relevant debits and credits to the respective heads.

Now, there can be many types of invoices. The first and the very basic classification can be:

  • PO based
  • Non-PO Based.

Based on how the business is setup, the invoices can be split into multiple segments:

  • Purchase Order Based Procurement Invoices
  • Non-Purchase Order Based Procurement Invoices
  • Purchase Order Based Service Invoices
  • Non-Purchase Order Based Service Invoices
  • Prepayments / Remittances
  • Payments needing special reporting (Like items to be reported in 1099)
  • Capital Equipment purchases
  • Trade-in-equipment invoice
  • Rental Equipment / Property
  • Trial Equipment invoice (with a Zero Payable)
  • Compensation Invoices
  • Interdepartmental invoices
  • Travel Bills
  • Expense Bills
  • Professional services invoices
  • Equipment maintenance bills
  • Annual maintenance invoices
  • Reimbursements
  • Freight Expenses
  • Refund Vouchers
  • Credit memos
  • Debit memos
  • Adjustment Vouchers / Journal Entries
  • Payroll payments

Looks like a lot of types, doesn’t it? Did you notice that I included service invoices as well? Invoices will relate to various vendors, whether material or services, whether core products or S G & A (sales and General administration) related items. There can be more, based on the specific industry.