How to prepare an invoice and the right accounting instructions For its entry

Published By Accflex
Date of publication 2018 January 24


How to prepare an invoice ?

Sales cycle in business has many stages that end with the issue of the client’s bill to prove the selling process  and to make an accounting entry to prove the maturity of the client’s debts  and the sales revenue . This bill includes the name of sold  items . their quantities , prices , deductions and taxes . 


How to prepare an invoice ?


Construction activity is based on the accounting and documentary cycle through which a certain service is presented for the client such as building a housing unit and its duration is more than a financial year . The service is presented according to a previous contract .


From the accounting perspective you have to record the achieved part of the service “ how much I finished from the housing unit “

The way of recording is the invoice  of the contractor , just like the client’s bill is  the recording of sales  . The invoice in construction activity is the bill and it consists of two parts : first , the work contacted upon achieving by the client and the degree of completion of each item and the actual completed previous work . Second : additions and deductions of the invoice such as added value tax or the schedule paid by the client for the tax authority . Deductions like the work bonus paid by the client if the work is achieved on the time in the contract .

Also there is the business insurance which is deducted from our account till the work is achieved completely .


What are the recorded entries ?

According to the invoice , accounting entry is used to record the client’s debts and also the revenue of the period 


Accounting entry :


               A        /   OWNER ( CLIENT )

               A        / BUSINESS INSURANCE 


               A          / OPERATING REVENUES 

              A         / ADDED VALUE TAX


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