Most companies must deal with cash flow, and in order to keep track of billing and income streams, invoices may be used. An invoice is a bill detailing services rendered or products purchased and their overall cost. These may come from outside vendors for the company or may be issued from the company to other companies or customers. An invoice book is a way to keep all of these invoices organized and stored. There are many reasons a business may keep invoices, including for tax purposes, cash flow analysis, and record keeping.
There are many benefits to keeping an invoice book. In the US and some other regions, some businesses may be able to deduct many of their purchases throughout the year when filing taxes. When this is done, there is a chance the companies will have to prove these purchases were made and that a certain amount was paid. Another good time to have invoice records organized in an invoice book is when analyzing cash flow. Most companies will examine cash flow once each quarter, and invoices can demonstrate where money is going and coming from.
Overall records keeping is the most common reason for keeping an invoice book. At times, there may be the need to show a vendor what has been paid or to show a customer what has not been paid. These books may be organized in any way that fits the company's needs. When the need arises, having the invoices in a convenient location may help avoid confusion or disputes.
Many businesses use electronic invoice software. This may work in many ways and again allows the company to organize and contain the invoices in a way which fits them. Keeping records electronically may save time and space, and there are typically many types of software available in many price ranges.
Still other companies utilize both paper and electronic invoices. An invoice book may contain the paper, also called physical invoices. The electronic books may have scanned copies of those invoices or may simply have the data from them entered and organized for quick research. There are benefits to both, and however a company chooses to store their invoices is entirely up to its needs.
Some companies may use many invoices on a daily basis. Many times, these invoices are smaller, and more can be lined up in the invoice book. It is generally recommended that a company save invoices for between three and seven years. This may create several stacks of books, which may be kept in an entirely separate records room or building.