🔍 What is an Invoice?
An Invoice is the final, official billing document that you issue to a client after delivering products or completing services. It is a legally enforceable record requiring the client to make payment.
Once you create an Invoice:
- It gets a unique Invoice Number (cannot be changed).
- It becomes part of your accounting and tax records.
- It is used to calculate GST and revenue.
🎯 Purpose of Invoice (With Real-World Example)
Invoices serve these main purposes:
- Recording Revenue: Recognize income earned from clients.
- Tax Filings (GST): Form the basis for GST returns and compliance.
- Tracking Payments: Monitor what has been billed, paid, or remains outstanding.
✅ Real-World Scenario
Your company finishes a web development project. You prepare an Invoice listing:
- Design charges
- Development charges
- Maintenance fees
- Applicable GST
You share this Invoice with your client. Once payment is received, you mark it as settled. The Invoice remains in records for audit and tax filing.
🧾 How to Create an Invoice
Steps:
- Go to Billing → Invoice → Add
- The Invoice creation form opens.
Below is a field-wise breakdown:
🔹 Header Fields
| Field | Description |
|---|---|
| Project | Select the relevant project. The system auto-fills client information based on the project. |
| Invoice Date | Date of issuing the Invoice. Cannot be earlier than your last Invoice Date. |
| Due Date | Last date by which payment must be made. Must be the same as or later than Invoice Date. |
📦 Billing Items
Use Add Billing Item to insert line items that you want to bill.
| Field | Description |
|---|---|
| Type | Choose “New” to create a fresh item or select from saved Catalog entries. |
| Title | Name/description of the product or service. |
| HSN Code | Relevant HSN/SAC code for GST classification. |
| Quantity | Number of units sold or hours billed. |
| Price/Unit | Pre-tax price per unit. |
| Net Amount | Auto-calculated: Quantity × Price/Unit. |
| CGST / SGST / IGST | Enter tax amounts in ₹ (not percentages). |
| Total | Auto-calculated: Net Amount + GST. |
➡️ You can add multiple items or remove any row as needed.
📊 Summary Section
| Field | Description |
|---|---|
| Sub Total | Sum of all item Net Amounts (before tax). |
| Tax Total | Total of all GST entered. |
| Grand Total | Final Invoice Amount = Sub Total + Tax Total. |
📎 Other Fields
| Field | Description |
|---|---|
| Documents | Attach contracts, supporting files, or images. |
| Notes | Add any remarks or special instructions. |
🔄 Auto-Creation via Proforma Invoice
Invoices can also be automatically generated by finalizing a Proforma Invoice.
How this works:
- When you Finalize a Proforma Invoice (refer to Proforma Invoice Documentation), the system converts it directly into an Invoice.
- The billing items, amounts, taxes, and project details are copied over.
- A new unique Invoice Number is assigned.
- This method avoids manual data entry and ensures accuracy.
⚙️ Action Items in Invoice View
| Action | Description |
|---|---|
| Export the Invoice to PDF for download or printing. You can do it from “Invoice View” Tab | |
| Send to Client | Email the Invoice directly to the client. |
| Edit | Make changes to the Invoice. |
| Delete | Permanently remove the Invoice. |
📌 Key Points
- Invoice is Final: No separate finalization step is required.
- Unique Number: System auto-generates a unique Invoice Number.
- Accounting Impact: Once created, the Invoice updates accounting records Eg Client/Project Statement, GST Information, Reports → PnL Report.
- Date Sequence: Invoice Date must always be after your last Invoice.
- GST Entry: GST amounts must be entered manually. either by % or by amount.
- Cancel Invoice: Once created you can not delete records however you can always edit or cancel the invoice details.
💡 Tips
- Always check Invoice Date and Due Date before saving.
- Use Catalog items to speed up billing.
- Attach reference documents to avoid disputes with clients.
- For similar processes, see the Proforma Invoice Guide.