Invoicing Glossary
A comprehensive guide to invoicing terms and definitions. Understand VAT, payment terms, and accounting terminology used in South African business.
A
Accounts Payable (AP)
Money owed by a business to its suppliers or vendors for goods and services received but not yet paid for. Appears as a liability on the balance sheet.
Accounts Receivable (AR)
Money owed to a business by its customers for goods or services delivered but not yet paid for. Appears as an asset on the balance sheet.
C
Credit Note
A document issued by a seller to a buyer reducing the amount owed. Used for returns, overcharges, or corrections to an invoice.
D
Debit Note
A document issued by a buyer to a seller indicating a request for a credit note or adjustment to an invoice amount.
Due Date
The date by which payment for an invoice must be received. Typically calculated from the invoice date based on payment terms.
E
EFT (Electronic Funds Transfer)
A method of transferring money electronically between bank accounts. Common payment method in South Africa.
G
Gross Amount
The total amount before any deductions such as discounts, taxes, or withholdings are applied.
I
Input VAT
VAT paid by a business on purchases and expenses. Can be claimed back from SARS if the business is VAT registered.
Invoice
A commercial document issued by a seller to a buyer, indicating products, quantities, and agreed prices for goods or services provided.
Invoice Date
The date when an invoice is issued. Used as the starting point for calculating payment due dates.
Invoice Number
A unique identifier assigned to each invoice for tracking and reference purposes. Should be sequential.
L
Line Item
An individual entry on an invoice representing a specific product or service, including description, quantity, and price.
N
Net Amount
The amount after deductions. Can refer to the amount before VAT (net of VAT) or after discounts (net of discounts).
Net 30 / Net 60
Payment terms indicating the invoice is due within 30 or 60 days of the invoice date. 'Net' means the full amount is due.
O
Output VAT
VAT charged by a business on sales to customers. Must be paid to SARS after deducting input VAT.
Overdue Invoice
An invoice that has not been paid by its due date. May incur late payment fees or interest.
P
Payment Terms
The conditions under which a sale is made, specifying when payment is due and any applicable discounts for early payment.
Pro Forma Invoice
A preliminary invoice sent before goods are delivered or services rendered. Not a demand for payment but an estimate or quote.
Purchase Order (PO)
A document issued by a buyer to a seller indicating types, quantities, and agreed prices for products or services.
R
Receipt
A document acknowledging that payment has been received. Issued after payment, unlike an invoice which is issued before.
Recurring Invoice
An invoice that is automatically generated and sent at regular intervals for ongoing services or subscriptions.
Remittance Advice
A document sent by a payer to a payee to inform them that their invoice has been paid.
S
SARS
South African Revenue Service. The government agency responsible for collecting taxes including VAT.
Statement of Account
A summary document showing all transactions between a business and a customer over a period, including invoices and payments.
Subtotal
The sum of all line items before taxes, discounts, or other adjustments are applied.
T
Tax Invoice
An invoice that includes VAT and meets SARS requirements. Required for VAT-registered businesses in South Africa.
V
VAT (Value Added Tax)
A consumption tax levied on goods and services in South Africa. The standard rate is 15%.
VAT Number
A unique number assigned by SARS to VAT-registered businesses. Must appear on all tax invoices.
W
Withholding Tax
Tax deducted at source by the payer before payment is made. Common for certain services and payments to non-residents.
Write-Off
The removal of an uncollectible debt from accounts receivable. Used when an invoice is deemed unlikely to be paid.