why do companies use invoices?

Answer 1

because they need them for account porposes.

tecnhically you should not make entries into any subsidiary book or ledger unles you have original documentation of the net gross and vat amounts. this is because companies can have there accounts auditted and wil need to validate a sale/purchase if necessary.

they are also used for coding purposes. this will help with stock management.

if purchase invoices some companies are able to reclaim vat and should keep these in the event inland revenue has a discrepency with their claim, again as proof.

Answer 2

Invoices are in fact legal documents and companies that issue them must keep duplicates for a period of at least 6 years. They are the proof that goods have been purchases, what tax is due or has been paid etc. Also useful for working out the profit and loss on buying price and selling price. They are an essential part of running a business. They usually contain the terms of trading in general and terms of trading with the receiving or supplied business.

Answer 3

How else would they be able to charge their customers otherwise? Plus the taxman would have a field day if nothing was declared!!


Businesses use invoices to keep a record of charges because thats how they make a profit.

Answer 4

It is legal documentation for future reference if it is ever needed and for them to keep track of all things done for tax reasons and and if there is any other questions or problems they have the invoice to go back to and make sure they have been paid in full for and everything went smoothly.

Answer 5

Company Law and other legislation require that all transactions between businesses and each other (and individuals) are documented in a clear transparent way, thus providing a clear 'Audit trail' for all interested parties and authorities to see.
Then if any challenges are made the evidence is 'self apparent' from GOOD PRACTICE. (Legal Requirements)

Answer 6

So that a customer can see exactly what they are being charged for and the company can also keep track what they are charging for and their turnover.

Answer 7

its like a reciept showing what is being charged and how much each item is, it allows stores to keep record of what they are being charged and when they where charged. they also give a reference because each have their own number at the top, in case you have to go back and look at a specific delivery