What this is
Every word here turns up on a document you send or a document you are sent: a quote, an invoice, a receipt, a purchase order, a lien waiver. Each entry gives the plain definition first, then what it means when you are the one doing the work, a worked example with real numbers, where the term shows up on the paperwork, and what usually goes wrong with it.
There is no accounting theory in here for its own sake. If a term does not change how you quote, bill or get paid, it is not on the list.
Start here
- InvoiceA document that asks a client for payment for work already delivered.
- QuoteA fixed price you are offering for named work, held open until a stated date.
- Payment termsThe line that says when payment is due, how to pay, and what happens if the date passes.
- DepositPart of the price paid before the work starts, credited against the final balance.
- Net 30Payment is due 30 days after the invoice date.
- Late feeA charge added to an invoice that is paid after its due date.
- Progress billingInvoicing one job in stages as they are completed, rather than in a single invoice at the end.
- Invoice numberThe unique reference that identifies one invoice, running in sequence with no repeats.
By what you are trying to do
The list below is alphabetical, which is the right order when you already know the word. This is the other way in: the terms grouped by the job, and each group ending with the guide that says what to do about them.
Getting paid on time
The words on the part of the invoice that decides when the money moves.
- Payment terms
- Business days
- Days past due
- Net 30
- Net terms
- Due date
- Overdue invoice
- Late fee
- Dunning
- Days sales outstanding (DSO)
Then read: Payment terms on an invoice · Getting paid faster
Pricing a job
What a price is made of, and the two percentages people mix up.
- Markup
- Gross margin
- COGS (cost of goods sold)
- Overhead
- Hourly rate
- Billable hours
- Unit price
- Time and materials
- Discount
Then read: How to price a job · Invoicing as a freelancer
Tax on the document
Where the tax line goes, and the numbers that have to sit beside it.
Then read: Sales tax on an invoice · Invoicing across a border
The documents themselves
Five documents, one job, and the words that name each part of them.
- Invoice
- Quote
- Estimate
- Proforma invoice
- Receipt
- Work order
- Purchase order
- PO number
- Invoice number
- Line item
- Itemized invoice
Then read: Which document to send · How to make an invoice
Money up front, and long jobs
Everything that happens when one job is paid for more than once.
- Deposit
- Advance payment
- Retainer
- Recurring invoice
- Milestone billing
- Progress billing
- Schedule of values
- Retainage
- Change order
- Lien waiver
Then read: Progress billing · Deposit invoices
When it goes wrong
The vocabulary of a queried invoice, an unpaid one, and a written-off one.
- Credit note
- Chargeback
- Void invoice
- Bad debt
- Write-off
- Aging report
- Accounts receivable
- Collection effectiveness index
- Aging bucket
- Statement of account
- Remittance advice
- Balance due
Then read: When a client disputes an invoice · Chasing an unpaid invoice
Taking the payment
How the money actually arrives, and what it passes through.
Then read: Payment links and QR codes · Getting paid faster
All terms
63 terms
AA
BB
CC
- Cash flowThe money moving in and out of your business, as opposed to the profit you have earned on paper.
- Change orderA written record of a change to the scope, price or schedule after the quote was accepted.
- ChargebackA card payment reversed by the client's bank after it has already reached you.
- COGS (cost of goods sold)The direct cost of what you sold: the materials and the labor that went into the job.
- Credit noteA document that cancels all or part of an invoice you have already issued.
DD
- Days sales outstanding (DSO)The average number of days it takes you to get paid after invoicing.
- DepositPart of the price paid before the work starts, credited against the final balance.
- DiscountAn amount taken off a price, shown as a percentage or a figure on the line or the total.
- Due dateThe date payment on an invoice is expected, written as a date rather than a term.
- DunningThe sequence of reminders sent to collect an overdue invoice.
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MM
- MarkupThe amount added to your cost to reach the price, expressed as a percentage of the cost.
- Merchant accountThe account that lets a business accept card payments and holds the money until it settles to your bank.
- Milestone billingInvoicing when a named stage of a job is finished rather than at the end.
NN
- Aging bucketOne of the age bands an unpaid invoice falls into: current, 1 to 30, 31 to 60, 61 to 90, or over 90 days past due.
- Collection effectiveness indexA score, as a percentage, of how much of the money available to collect in a period you actually collected.
- Billable hoursThe hours a client actually pays for, after time off and all the work nobody charges for.
- Business daysWorking days, Monday to Friday, used in contracts and terms where weekends do not count.
- GSTGoods and services tax: a tax charged at each stage of supply, with businesses reclaiming what they paid, so it lands on the final buyer.
- Days past dueHow many days have passed since an invoice's due date, not since it was raised.
- Net 30Payment is due 30 days after the invoice date.
- Net termsCredit terms giving the client a set number of days to pay after the invoice date.
OO
PP
- Payment portalA hosted page where a client can pay an invoice by card or bank transfer.
- Payment processorThe company that moves a card or bank payment from your client's account to yours.
- Payment termsThe line that says when payment is due, how to pay, and what happens if the date passes.
- PO numberThe client's own reference for an order, quoted on your invoice so their accounts team can match it.
- Proforma invoiceA document that shows what the final invoice will contain, sent before the work or the shipment.
- Progress billingInvoicing one job in stages as they are completed, rather than in a single invoice at the end.
- Purchase orderA document you issue to a supplier that commits to buying named goods at named prices.
RR
- ReceiptProof that a payment was made, issued after the money arrives.
- Recurring invoiceAn invoice issued on a repeating schedule for work that continues month after month.
- Remittance adviceThe note a client sends saying which invoices a payment covers.
- RetainageA percentage of each progress payment held back by the client until the job is accepted.
- RetainerMoney paid in advance to hold your availability or to draw against for ongoing work.
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WW
No term matches that. Try a shorter word, or browse the letters above.