What are Supplier Invoices? Definition and Payment Methods

Invoices are one of the most important parts of the accounting process for businesses, helping them keep track of all the goods and services they buy.

They can also be a bit confusing. In this article, we’ll discuss what supplier invoices are and also talk about how Wise Business is a good way to pay them on time and at a low cost.

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Table of Contents
What is a supplier invoice? Supplier invoice example and necessary information Receipt vs. Invoice: What’s the difference? Services to pay invoices Wise Business: Save while sending money overseas

What is a supplier invoice?

A supplier invoice (or vendor invoice) is a document sent by a vendor or supplier to a buyer requesting payment for goods or services that the business has provided.

These invoices are essential for businesses because they keep track of the money that the business owes to its suppliers. Without these invoices, it would be hard to keep track of expenses and payments, which can lead to confusion and mistakes.

Late payments can result in damaged relationships with suppliers and delayed deliveries, which can have a huge impact on the business.

In addition, keeping track of supplier invoices can help businesses better manage their cash flow and ensure that they have enough money to pay their suppliers on time.

To be legally considered as an invoice, a document should include the following²:

1. The total charge
2. The tax amount
3. The tax rate

If you apply any tax exemptions, the invoice should then show which goods or services are exempted.²

Supplier invoice example and necessary information

In this example, let’s say that you own a coffee shop, and you purchase coffee beans from a supplier. When your supplier delivers the coffee beans, you’ll also get an invoice from the supplier.

The supplier invoice will include important information such as:

• The date the invoice was issued
• The name and address of your coffee shop
• The name and address of the supplier
• A description of the products or services provided (in this case, it would be the type and quantity of coffee beans)
• The unit price of the product
• The total cost of the products or services provided
• Any applicable taxes or fees
• Payment terms, such as the due date and accepted payment methods

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If we break down these components a little further, we can see why they’re so crucial to have. Seeing when exactly the invoice was issued makes it easy to keep track of when you received the goods or services. Especially if you need to dispute any charges or reconcile your accounts, this is something you’ll need to have.

The name and address of your coffee shop and the supplier are important for record-keeping and communication purposes. If you have any questions or concerns about the invoice, you'll know who to contact.

The description of the products or services provided works to verify that you received what you ordered. In this example, the coffee beans should be the correct type and quantity that you requested.

The unit price and total cost of the products or services provided are important for obvious reasons. You'll want to make sure you're being charged the correct amount and that you're not overpaying.

Any applicable taxes or fees should also be clearly outlined on the invoice. You won’t want to have this omitted from the total cost, and it also helps you keep track of expenses for tax purposes.

And when it comes to payment terms, they’ll let you know when the invoice is due and what payment methods are accepted. Knowing all of this in advance means you can plan your cash flow and pay on time to avoid late fees or penalties.

Receipt vs. Invoice: What’s the difference?

The difference between invoices and receipts is that an invoice is provided prior to purchase as a request for payment. It often outlines the pertinent information for the both parties involved.

A receipt is given as a proof of payment and is important to claim business expenses during tax season.

Services to pay invoices

Manual vendor invoice processing can be a hefty task. 34% of businesses cited stress on accounts payable teams as a top challenge when it comes to managing these invoices.³ Another 25% reported late payments often result in damaged relationships with suppliers and delayed deliveries.³

To make the process easier, businesses can turn to various online invoicing services that can make payment a breeze. Automating supplier invoices can be a smart move for those looking to improve their payment processes and who want to start focusing more on strategic tasks. It can save your staff time, improve productivity, increase timeliness, and strengthen supplier relationships.

You can forget worrying about anomalies, delays, and other roadblocks to paying invoices. Automated services can also help reduce the risk of fraudulent invoices, as well as save on costs associated with manual processing and paper checks.

Let’s take a look at some services available to improve your invoice payment process.

Wise Business: Save while sending money overseas

The Wise Business account helps businesses pay invoices efficiently and cost-effectively. With Wise, you can pay one-off invoices, recurring payments, and mass payouts in over 70 countries, with competitive exchange rates (19x lower than PayPal) and super low fees. If you’re a business with suppliers or clients in different countries, it eliminates the need for expensive international wire transfers or currency conversions.

Thanks to the easy-to-use online platform, businesses can manage all their payments in one place. The platform also provides real-time tracking of payments, so businesses can keep track of when invoices have been paid and when they are due. This won’t just help businesses stay on top of their finances but maintain positive relationships with suppliers by ensuring timely payments.

How does Wise Business help you save?

Using the mid-market rate, Wise Business can help you save money on international payouts compared to other payment methods.

Whether you're paying for a small order or a large shipment of goods, using Wise Business can help you keep costs down and make sure your money gets to your supplier quickly and securely.

• International: Hold a balance in 50+ currencies and make payments in 70+

• Batch Payments: Send up to 1000 invoices in one click (free with account)

• Wise Business API: Set up recurring and automated payments (free with account)

• Low fees: 19x cheaper on average than sending through PayPal

• Integrates with popular account software: QuickBooks, Xero, Wave, Sage

The best part: the Business API and Batch Payments come with no additional payment for US-based businesses.

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No monthly fees, no monthly balance requirements

No account opening fee for US-based businesses

PayPal

PayPal's invoicing platform allows businesses to create customized invoices that can be sent via email or a shared link.⁴ The invoices can include details such as due dates, payment terms, and itemized charges, making it easier for suppliers to track payments and for businesses to manage their accounts payable.

The platform is particularly known for its speed, as PayPal processes payments quickly, with 79% of invoices typically paid within one day of sending it.⁴ While PayPal is primarily focused on payment processing, Wise offers a wider range of international money transfer services, including currency exchange and borderless accounts.

PayPal’s fees are likely the least appealing part of the platform, with no monthly fees yet fixed and percentage fees that differ by the currency received. You’ll be set back 3.49% + $0.49 per USD transaction and for cards and alternative payment methods, 2.99% + $0.49 per USD transaction.⁴

Square

Square is known for its range of financial and business tools for businesses to seamlessly manage their finances.⁵ One of their most popular products is their point-of-sale systems, but they also have an invoicing service that allows businesses to easily pay an invoice from the supplier for goods or services.

Just like our other aforementioned services, it offers useful features such as digital invoices and estimates, custom invoice templates, and invoice tracking. As well, Square allows you to create digital contracts and collect e-signatures and use their other payment processing tools for an effective financial management experience.

Wave

Wave is an all-in-one accounting, invoicing, and receipt scanning platform.⁶ This can be especially helpful for small businesses or freelancers who may not have the budget to invest in expensive accounting software. The platform lets businesses schedule recurring payments for regular expenses without the need for manual intervention. And what’s more, all your invoicing and payment information will automatically sync with the free Wave Accounting software.

They also boast a range of payment options, such as major credit cards like Mastercard and Visa, Apple Pay, and bank payments, to make it easier for businesses to pay a vendor invoice.

💡 For all you need to know about invoices, don't forget to read and bookmark the ultimate guide to invoicing from Wise!

Learn more:

How to Find Wholesale Suppliers, Distributors, and Manufacturers

How to Find Overseas Suppliers in 5 Steps | Practical Advice

3PL Warehousing Guide: What is it? Do you need It?

11 Tips for Supplier Payments: What you need to know

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Sources:

1. https://www.trustpilot.com/review/wise.com
2. https://www.freshbooks.com/hub/invoicing/are-invoices-receipts&sa=D&source=docs&ust=1683120540136279&usg=AOvVaw1J8TyVLbQLBwj6yG9Zn4lr
3. https://www.webexpenses.com/us/resource/global-report-accounts-payable-automation-trends/
4. https://www.paypal.com/us/business/accept-payments/invoice
5. https://squareup.com/us/en/invoices
6. https://www.waveapps.com/invoicing