Invoice
What is an Invoice?
An invoice is a commercial document that itemizes a transaction between a supplier and buyer, showing what was delivered, when it was delivered, payment terms, and how much is owed. It's essentially the seller saying "here's what you bought, here's what you owe, please pay by this date."
But let's be real - in the world of B2B commerce, an invoice is so much more than a document. It's a compliance nightmare, a cash flow controller, and the source of constant customer service arguments. If you've ever dealt with invoice disputes, you know exactly what I'm talking about.
How Does Invoicing Actually Work in Most Companies?
Here's what happens in reality. Your system generates an invoice after order fulfillment. Or maybe after order shipment confirmation. Or possibly after some random trigger that nobody quite remembers setting up. It's the final step in the order-to-cash cycle. This invoice needs to match the customer's PO, except it never quite does because they ordered "Widget A" but your system calls it "WGT-A-001-REV2" and now their AP department is confused.
So you email the invoice. But wait - BigCorp needs it through EDI. SmallCo wants it in their vendor portal. MediumCo insists on receiving it by mail (in 2025!). And that one customer somehow convinced you to text them photos of invoices because "that's just easier for everyone."
Meanwhile, your AR team is playing detective. "Why hasn't Customer X paid?" Well, turns out they never received the invoice. Or they received it but it went to the wrong person. Or they received it but it didn't have the right PO number. Or my personal favorite: they received it, processed it, but their system rejected it for some arcane reason and nobody noticed for 45 days.
Why Are Invoices Wrong So Often?
Look, everyone talks about getting paid faster, but nobody talks about why invoices are wrong in the first place. Your sales team offers a discount but forgets to tell accounting. The warehouse ships a substitute product but the invoice shows the original. Freight charges get calculated three different ways depending on who's asking.
And the reconciliation? Forget about it. You've got credit memos, debit memos, partial payments, and that one customer who always deducts 2% even though their payment terms don't include it. Your AR aging report looks like abstract art.
The worst part? Most companies find out their invoice is wrong when the customer complains. By then, you're already 30 days into your payment terms and starting from scratch.
The Format Wars That Drive Everyone Crazy
Every customer wants their invoice differently, and I mean EVERY customer. Customer A needs line-item part numbers in their format. Customer B wants your internal SKUs. Customer C requires cost center allocations that make no sense to anyone outside their organization.
Then there's the technical format chaos. EDI 810 for some customers. cXML for others. PDF attached to email for the traditional ones. API calls for the modern ones. And somehow you're supposed to maintain all of these without losing your mind.
The enterprises are the worst. They'll have a 40-page supplier guide explaining exactly how invoices must be formatted, which fields are required, how to handle partial shipments, and what happens if you dare to submit an invoice incorrectly. Miss one requirement and your invoice gets rejected, starting the payment clock all over again.
And this is exactly what order automation eliminates - when order data is clean from the start, invoices naturally follow. No more scrambling to match PO numbers, no more guessing at pricing, no more format confusion.
How Does Invoice Automation Actually Help?
When people hear "invoice automation," they think about generating PDFs faster. That's missing the point entirely. Real invoice automation means the invoice is correct the first time, every time, because it's based on validated order data and actual shipment information.
Here's where automation changes everything. Instead of generating an invoice and hoping it matches what the customer expects, modern platforms validate everything upfront. They match the ship notice to the PO, confirm pricing agreements, calculate freight correctly, and format everything exactly how each customer wants it.
Systems like Billtrust, AvidXchange, or platforms with intelligent document processing don't just send invoices - they ensure invoice accuracy before sending. They track whether the invoice was received, opened, and processed. They flag issues before they become disputes. This isn't about making PDFs; it's about getting paid without the drama.
What Do Invoice Problems Really Cost?
Most companies have no idea how much bad invoicing costs them. It's not just delayed payments (though that's bad enough). It's the hours your AR team spends on the phone. It's the credit holds that stop shipments. It's the customer relationships that deteriorate because of constant billing issues.
Think about the real cost of invoice processing - not just sending the document, but all the follow-up, corrections, and disputes. Every phone call to verify a PO number. Every email to confirm pricing. Every spreadsheet reconciliation to apply the right discounts. It adds up to dozens of dollars per invoice, and that's before counting what disputes actually cost.
And dispute resolution? It takes weeks and involves way too many people across both organizations. For what should be a simple transaction document.
How Can You Make Invoicing Less Painful Right Now?
If you're stuck with manual invoicing for now, at least do these things:
Capture the customer's PO number correctly at order entry. This solves a huge percentage of problems right there. Don't let sales reps put "verbal" or "TBD" in the PO field. Make them get the actual number.
Set up customer-specific invoice templates. Yes, it's a pain to maintain, but it's less painful than constant rejections. If BigCorp wants their part numbers and cost centers, give them their part numbers and cost centers.
Send invoices immediately after shipment. The longer you wait, the more likely something gets lost or disputed. Plus, you can't fix problems you don't know about.
Track what happens to your invoices. Did the customer receive it? Did it get processed? You need to know before they claim they never got it.
Frequently Asked Questions About Invoices
What's the difference between an invoice and a bill?
Functionally, nothing. "Invoice" is what the seller calls it. "Bill" is what the buyer calls it. Same document, different perspective. Though if you call it a bill when sending to a customer, you'll look like an amateur.
When should I send the invoice - before or after delivery?
Depends on your terms and industry norms. Most B2B companies invoice upon shipment, not delivery. But if you're drop-shipping or have special arrangements, you might invoice differently. Just be consistent and clear about your terms.
Why do customers keep asking for "pro forma" invoices?
Because they need to get approval before the real purchase. A pro forma invoice is basically a quote dressed up as an invoice. It shows what they would pay if they actually ordered. International customers love these for customs and currency planning.
Should I use invoice numbers or can I just reference the PO?
Always use sequential invoice numbers. Always. It's not just good practice - it's required for audit trails and many compliance standards. Plus, when a customer says "about invoice 12345," everyone knows exactly what they're talking about.
Stop invoice errors before they cost you 45 days of cash flow. See how order automation ensures accurate invoicing from the start - capturing the right prices, quantities, and ship-to details upfront so invoices match POs, match delivery, and get paid on time. Because fixing invoice disputes three weeks after shipping is how you destroy customer relationships and your DSO.