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Outsourced Sales Invoicing is Crucial Phase of Bookkeeping

Updated: Aug 4, 2020

Sales are the most prolific aspect of any business entity. It is the main objective of business existence. It represents the company’s positive or negative image to the outside world. We can state that Sales are the lifeblood of any business.


As the old saying says ‘It takes years to win a customer and only seconds to lose one’. Customers are the pillars for the success of a business. Either we sell goods on a cash or credit basis, we should have supporting evidence. A Bill is a memo or voucher or document indicating goods sold, quantity, rate, name, and address of the customer. It’s a stamp of being sales made to the customer. The billing pattern varies from one company to another but principal elements of billing/invoicing remain the same.


Following are the general information that a Sales Invoice contains:

  1. Business details of the seller (Name, Address, Contact no.)

  2. Details of Purchaser

  3. Date of Invoice

  4. Invoice Number

  5. VAT Registration Number (in case of VAT reg. client)

  6. List of goods or services provided

  7. Discount is given

  8. Total bill amount

  9. The amount received (either fully or partially)

  10. Payment Terms

Generally, Bookkeeping outsourcing includes the sale invoicing. Bookkeeping of sales invoicing required information such as; sales invoices, credit notes, and bank statements.


Let’s discuss why sales invoicing is an important aspect of bookkeeping service:


  • Grassroots of Business Income:

Sales are the main indicator of business success. Recording of sales invoice creates fundamental evidence of sales being made. Proper recording of sales invoices enables the business to track cash flow, the amount due from customers. It also helps to forecast sales, formulate proper policy for debt collection, increasing the customer base, and determine government dues.

  • To streamline collection:

Recording sales, invoicing helps businesses streamline their cash collection. Recording of sales helps the business to identify the amount due from the customers’ day-wise such as 15 days, 30 days, 45 days, etc. This will help the sales manager to keep a track of customers and the collection dues on a timely basis.

  • Usage of Software:

The outsourced bookkeeping service provider uses the latest software for sales invoice entry. The software generates various reports like monthly, quarterly, half-yearly, or even daily and weekly. Reports like day-wise outstanding debtors, cash collection, and stock summary help businesses to stay focused on business.

  • Protection in Contingency:

In case any undesired situations like sales return, lawsuit, variance in rate, and quantity; sales invoice protects the business against that. The physical document has more reliability and it is also made duly as per the concern of the client.

  • Determine accurate tax liability:

Recording of sales invoices not only gives accurate sales reporting, but it is immensely beneficial in determining the tax liability of the entity. Sales have a direct impact on tax. Increase in sales increase in tax liability and vice versa. From the viewpoint of government and economy, proper recording of sales becomes vital for a business organization. Recording of sale relies on invoice or document supporting to sales.


Therefore, sales invoice generation and recording is equally an important part of Bookkeeping.

 
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