Normal businesses operate on sale and payment agreements. Customers purchase products and then make payments for those products. But some businesses and even some customers may be interested in making advance payments. Some businesses might have advance payment agreements. The main objective of such a clause is to avoid any losses in the future. The amount collected in advance will be treated as a liability by the company. The liability converts into revenue only when the goods are delivered.
Business and customers have a special relation with each other. Maintaining good relations with the vendor means a lot in the business world, as timely inventory means a productive manufacturing run. Making advance payments can help strengthen the relationship and builds trust with the vendor. Advance payments mean that the vendors can be sure that they will not be incurring major losses. In some cases, the customer might be making a partial advance payment and not the whole amount.
A well paid and timely advance payment brings the customer in more of a bargaining position as the vendor will be more than willing to set a deal as per the choice of the customer. An advance payment is a security instrument for the vendor. If the customer cancels the deal at any time, the vendor and the customers bear the losses equally.
In today’s world, many of the businesses collect an advance payment, also known as a retainer, before selling products or rendering the services offered by the company. This amount will not be capitalized as an income in the books of the company, but as a liability that is an indication that the product or the service for which this advance payment has been taken for, should be delivered as soon as possible. This invoice is the proof of an advance payment of that undelivered service or product. If the liability is settled that goal of this invoice is settled as well, however, if any of the parties fails to comply with, this invoice would tell all the real details about the deal.
The invoice should contain certain details about the deal that will make it authentic and real. The invoice should contain the name and logo of the delivering company along with the date on which the invoice was made. It should also contain all the particulars about the product or the services that are to be delivered, clearly stated so that no misunderstanding can occur in later future. The amount is received by the service provider and paid by the service receiver should be written clearly once without any adjustments and the second time with adjustments, if any. The total of the amount should be written both in numbers and in words as well. This is to avoid any misunderstanding. The invoice should be signed by both the parties.
A retainer invoice includes:
- Contact details of the vendor
- Contact details of the customer
- Invoice number
- Invoice date
- Due date of payment
- Balance due
- Reimbursable expenses
- Description of the purchase
- Quantity of goods purchased
- Taxes applicable on the goods
- Mode of payment
Retainer Invoice Template
For: EXCEL(.xls) 2003 & later [Android+iOS] & iPad
Download File Size: 36 kb
For: OpenOffice Calc [.ods]
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