Get updated on your invoicing vocabulary with these 11 important invoicing terms.

1. 11 INVOICING
TERMS EVERY
SMALL BUSINESS
& FREELANCER
SHOULD KNOW

3. Introduction
It’s very difficult to establish and grow your businesses
without important financial vocabulary.
That’s why many small business owners and freelancers put
off financial responsibilities until their businesses creak and
groan.
It’s nearly impossible to have a successful business
without getting familiar with some accounting vocabulary.
These are the 11 most important invoicing terms for small
businesses and freelancers.

4. 1. Recurring Invoice
Sometimes you’ll need to send invoices not one time, but on a
regular basis. This could be if:
• you are providing web hosting services,
• you do gardening and cleaning
• any other kind of monthly service that has the same price
Recurring invoicing allows you to send an invoice automatically
any period according to your need. InvoiceBerry makes it easy
to set up your recurring invoices.

5. When you are busy getting customers, or customers send
requests to you, you’ll need to send them a quote, quotation or
estimate. It should have:
• the price,
• a breakdown of how you’ve determined the price
• a time schedule
InvoiceBerry makes it easy for you to turn your quote into an
invoice with just the click of a button.
2. Quotes & Estimates

6. 3. Proforma Invoice
A proforma invoice is comparable to a quote/estimate. More
specifically, it:
• is the price that you and the customer have already
agreed upon
• a binding agreement before goods are delivered
Think of a quote or estimate as “I hope we can deal” and a
proforma invoice as “the deal is done.”

7. 4. Interest Invoice
An interest invoice is an invoice sent after a customer is late on
payment. The invoice is created with only the interest listed and
will include:
• the time period
• the month or months of missed payment
• the interest on those missed payments
Charging a customer interest and creating an interest invoice,
however, is a sensitive issue.

8. 5. Fiscal Year
The fiscal year, or financial year, is determined by each
business. This may coincide with your tax or accounting year,
although it is not necessary.
Different industries generally set different fiscal year periods.
For example, if you are in a highly seasonal business, you would
set your fiscal year to coincide with your seasons.
This way the fiscal year ends after the season ends, and not in
the middle.

9. 6. Expenses
There are four types of expense important for you to know:
• fixed expenses, consistent on a monthly, yearly basis
• Variable expenses are determined by the business
• discretionary expenses are “wants” not “needs”
• operating expenses, the costs that your business needs in
order to operate

10. 7.Taxsummary
A tax summary is a summary of your taxable amount and a total
value of the taxes you have paid on that amount for a specific
period.
Individuals may also get their personalized tax summaries from
their governments on a yearly basis.
In InvoiceBerry, it’s easy to create your tax summary report for
any time period.

11. 8. Item Revenue
Item revenue is a review of the revenue created by a specific
item.
On online invoicing software such as InvoiceBerry, it is easy to
check the item revenue for a certain time period.
It allows you to determine how much revenue a specific item
that you’ve created (such as ‘Wedding Photographs’ or ‘Yard
Cleaning’) earned for that period.

12. 9.ProfitandLossStatement
A P&L lists the revenues, costs and expenses for a specific time
period. This time period is usually your fiscal year, or it could be
a fiscal quarter (for larger companies).
In the UK, if you’re a sole trader or limited company making
more than £50,000 a year, you’re required to submit one to the
HMRC.
InvoiceBerry has free P&L templates by clicking here.

13. 10. Cash Flow Statement
The cash flow statement shows how much cash and cash
equivalents have gone through the company. It includes:
• operations lists how much cash inflows and outflows have
been generated by the business product or services
• investing relates to equipment, buildings or short-term
assets
• financing concerns debts, loans and dividends
Download our free Cash Flow Statement here.

14. 11. Balance Sheet
It is used to describe a company’s financial position at a certain
point in time, and is often referred to as a “snapshot” of the
company’s financials. It lists:
• the company’s assets
• the liabilities and obligations
• the business owner’s financial involvement
InvoiceBerry’s free balance sheet template can be found here.

15. 11 Invoicing Terms
Every Small Business &
Freelancer Should Know
Read our full article by following the link below:

16. Send
invoices
Track
expenses
Create
reports
Manage
clients
Track
payments
Multi-
currency
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