Introduction
When it comes to managing cash flow, few things are more frustrating than delayed payments especially when the root cause is as simple as a customer not receiving the invoice. Whether you’re a supplier dealing with complex billing cycles or a finance leader aiming to reduce Days Sales Outstanding (DSO), the right invoice distribution strategy can make all the difference. This is where understanding the different types of invoices and how to manage their distribution becomes essential.
In this blog, we’ll explore the various invoice types used in B2B transactions, why they matter, and how B2BE's Managed Customer Invoice Distribution Lösung helps ensure your invoices are always received, tracked, and paid on time, every time.
Table of Contents
- Key Takeaways
- What are the different types of invoices?
- Why invoice distribution matters more than ever
- How B2BE’s Managed Customer Invoice Distribution works
- Benefits for buyers
- Benefits for suppliers
- Best practices for implementation
- FAQs
- Conclusion
Key Takeaways
- There are many types of invoices in B2B transactions, including VAT, PO, non-PO, and credit memos. Each of them have specific uses in different situations.
- Late payments often stem from invoice delivery issues, not just customer delays.
- B2BE's Managed Customer Invoice Distribution ensures invoices are delivered, tracked, and acknowledged which helps to reduce DSO and improving cash flow.
- The solution supports multiple delivery formats (E-Mail, EDI, E-Invoicing, print) and includes proactive tracking and managing for unpaid invoices.
- Seamless integration, global accessibility, and strong compliance features make it ideal for businesses of all sizes.
What are the different types of invoices?
Invoices are more than just payment requests. In fact, they’re essential financial documents that reflect the nature of a transaction, its terms, and its compliance requirements. In B2B environments, different invoice types serve different purposes, depending on whether the transaction is recurring, tax-related, or based on a purchase order. Understanding these distinctions helps businesses streamline operations, avoid disputes, and ensure timely payments.
Here are the most common types of invoices used in accounting and supply chain finance:
1. VAT Invoice
When a business sells goods or services that are subject to Value Added Tax, it issues a VAT invoice. It must include the supplier’s VAT registration number, the VAT rate applied, and the total VAT amount charged. These invoices are essential for tax reporting and reclaiming VAT in many jurisdictions.
Example: A UK-based electronics supplier sells components to a distributor in Germany. The invoice includes a 20% VAT charge, clearly itemised for cross-border tax compliance.
2. PO Invoice (Purchase Order Invoice)
The supplier generates a PO invoice in response to the buyer’s purchase order. It references the PO number and matches the agreed-upon quantities, pricing, and terms. PO invoices are typically processed using either 2-way matching (invoice vs PO) or 3-way matching (invoice vs PO vs goods receipt), depending on the organisation’s internal controls.
Example: A construction company sends a PO for 500 units of steel beams. The supplier issues a PO invoice that matches the PO details, enabling automated approval and faster payment.
3. Non-PO Invoice
A non-PO invoice is issued when no purchase order exists. Businesses commonly use these for ad-hoc purchases, professional services, or emergency procurement when they haven’t raised a PO beforehand. Non-PO invoices often require manual review and approval, which can slow down processing.
Example: A marketing agency bills a client for a one-off campaign consultation. Since no PO was created, the invoice is manually reviewed and approved by the finance team.
4. Credit Memo (Credit Invoice)
Suppliers issue a credit memo to reduce the amount the buyer owes, typically due to returned goods, overbilling, or service adjustments. It acts as a negative invoice and is often linked to the original invoice for reconciliation. Credit memos help maintain accurate financial records and customer trust.
Example: A retailer returns 100 defective units to the supplier. The supplier issues a credit memo to offset the original invoice amount and reflect the returned goods.
5. Proforma Invoice
A proforma invoice is a preliminary bill sent before goods or services are delivered. It outlines the expected charges and terms but is not legally binding. Sellers often use proforma invoices in international trade to help buyers understand costs before they commit to a purchase.
Example: An exporter sends a proforma invoice to a buyer in Singapore to confirm pricing and shipping terms before dispatching the goods.
6. Recurring Invoice
Businesses automatically generate recurring invoices at regular intervals for subscription-based services or ongoing contracts. They simplify billing for repeat transactions and help businesses maintain consistent cash flow. These invoices typically include the same line items and payment terms each cycle.
Example: A SaaS provider bills its clients monthly for access to its platform. The recurring invoice includes the same amount and billing cycle each month, reducing administrative overhead.
Watch our video round-up below:
7. B2B Invoice
A B2B invoice is a type of invoice exchanged between two businesses. It usually includes detailed line items, payment terms, tax information, and references to contracts or POs. B2B invoices are often subject to stricter compliance and audit requirements than consumer invoices.
Example: A logistics firm invoices a manufacturer for freight services rendered across multiple locations, with itemised charges and net 30 payment terms.
8. Digital Invoice
A digital invoice is any invoice that is created, sent, and stored electronically, typically in formats like PDF, Word, or Excel. It replaces traditional paper invoices and allows for faster delivery, easier archiving, and reduced manual handling. Although businesses do not always structure digital invoices for automated processing, they use them as a key step toward digitisation, and small to mid-sized companies widely adopt them.
Example: A wholesale distributor emails a PDF invoice to a retail client immediately after dispatching goods. The client downloads the invoice and manually enters the details into their accounting software for payment processing.
9. E-Invoice (Electronic Invoice)
An e-invoice is a structured digital invoice that is transmitted directly between systems using formats like XML, EDI, or PEPPOL. Unlike standard digital invoices, businesses design e-invoices for automated processing, validation, and compliance with government regulations. Many countries increasingly mandate them for B2B and B2G transactions.
Example: A manufacturer in Italy sends an e-invoice via the national SDI platform, ensuring compliance with local tax regulations and enabling automatic posting in the buyer’s ERP system.
10. Sales Invoice
The seller issues a sales invoice to the buyer to request payment for delivered goods or services. It includes details such as item descriptions, quantities, pricing, payment terms, and due dates. Sales invoices are used to record revenue and initiate the accounts receivable process.
Example: A furniture manufacturer delivers a custom order to a hotel chain and issues a sales invoice detailing the items, delivery date, and payment terms of 30 days.
Why Invoice Distribution Matters More Than Ever
In today’s global business environment, sending an invoice is no longer enough. Suppliers must ensure that buyers receive, acknowledge, and process invoices on time.
Payment delays often stem from simple issues like mismatched delivery formats, lost emails, or lack of visibility into whether the invoice was viewed. These seemingly minor problems can snowball into serious cash flow disruptions.
According to the World Economic Forum, global supply chain disruptions including logistics bottlenecks, labour shortages, and surging demand have led to record-high delivery delays all over the world since late 2020. These delays don’t just affect physical goods — they also impact the timely exchange of financial documents like invoices, which are critical for maintaining healthy cash flow.
Regulatory pressures are also increasing. Governments around the world are mandating e-invoicing compliance, requiring suppliers to track invoice delivery, maintain audit trails, and ensure data security. In regions like the European Union, Latin America, and Southeast Asia, failure to comply can result in penalties or rejected invoices.
This is why proactive invoice distribution is no longer optional. It is a necessity that suppliers must adopt. More than ever, choosing solutions that provide real-time visibility, automated alerts, and multi-format delivery options ensure every type of invoice reaches its destination and gets paid on time.
How B2BE’s Managed Customer Invoice Distribution Works
B2BE's Managed Customer Invoice Distribution Lösung eliminates the guesswork and manual effort involved in invoice delivery. It ensures that every invoice, regardless of type or format, is delivered to the right customer through their preferred channel and confirmed as received.
Watch our introductory video to Managed Customer Invoice Distribution:
This proactive approach helps suppliers avoid late payments caused by delivery failures or lack of visibility. Here are some other important features of the solution:
Multi-format delivery options
Send invoices via email, EDI, e-invoicing, facsimile, or print and post based on what your customer prefers.
Real-time tracking and alerts
Monitor invoice delivery status through B2BE’s portal. If an invoice hasn’t been viewed or acknowledged, automated alerts notify your team to follow up before the due date.
Customer self-service portal
Customers can log in anytime to access current and historical invoices and statements, reducing re-send requests and improving satisfaction.
Complete document exchange history
Maintain a full audit trail of invoice delivery and interactions, simplifying compliance and internal reviews.
Automation and visibility
Reduce manual tasks and gain transparency across the invoice lifecycle, helping your team focus on strategic financial operations.
With this in mind, what are some benefits that buyers and suppliers can expect from integrating the Managed Customer Invoice Distribution solution into their business?
Benefits for Suppliers
For suppliers, invoice delivery is an incredibly critical part of maintaining healthy cash flow and operational efficiency. When invoices go missing, arrive late, or aren’t acknowledged, it can lead to delayed payments, strained customer relationships, and increased administrative burden.
B2BE's Managed Customer Invoice Distribution Lösung helps suppliers take control of this process. Here’s how suppliers benefit from using B2BE’s solution:
Accelerate Cash Flow
Ensure invoices are received and processed on time, reducing Days Sales Outstanding (DSO) and improving liquidity.
Proaktives Zahlungsmanagement
Receive automated alerts when invoices haven’t been viewed, allowing your team to follow up before the due date and avoid last-minute surprises.
Reduce Operational Costs
Eliminate manual invoice creation, printing, and postage. Free up your finance team to focus on higher-value tasks.
Improve Invoice Visibility and Control
Track invoice delivery status across all types of invoices and maintain a complete audit trail for compliance and internal reporting.
Strengthen Customer Relationships
Shift from reactive collections to proactive communication. Ensure customers receive invoices in their preferred format, reducing disputes and fostering trust.
Simplify Compliance
Meet local e-invoicing regulations and maintain secure document exchange histories to support audits and regulatory reviews.
Benefits for Buyers
While suppliers gain control and visibility, buyers also benefit significantly from B2BE's Managed Customer Invoice Distribution Lösung. Receiving invoices in the right format at the right time with easy access to historical records helps buyers streamline their own accounts payable processes and reduce friction in supplier relationships.
Here’s how buyers benefit from the solution:
Preferred Delivery Formats
Buyers receive invoices in the format they prefer (email, EDI, e-invoicing, fax, or print) making it easier to integrate with their internal systems and workflows regardless of the type of invoice.
Self-Service Access
Through B2BE’s customer portal, buyers can log in anytime to view current and past invoices and statements, reducing the need to request duplicates or chase missing documents.
Fewer Disputes and Delays
Clear, timely invoice delivery reduces misunderstandings and disputes over payment terms, quantities, or delivery dates.
Improved Processing Efficiency
With invoices arriving in the correct format and on time, buyers can process them faster, improving their own payment cycles and supplier relationships.
Audit and Compliance Support
Buyers benefit from a complete document exchange history, making it easier to comply with internal audit requirements and external regulations especially when handling multiple types of invoices.
Best Practices for Implementation
Successfully implementing a managed invoice distribution solution starts with understanding your current processes. Begin by reviewing the types of invoices your organisation sends — such as PO, non-PO, VAT, and credit memos — and how they’re currently delivered. This helps tailor the solution to meet both operational and customer-specific needs.
It’s important to involve key stakeholders early, including finance, IT, and customer service teams. Their input ensures the solution integrates smoothly with existing systems and supports cross-functional goals. Once implemented, configure delivery preferences based on customer formats and set up automated alerts to flag invoices that have not been viewed.
Training is also essential. Equip your internal teams and customers with the knowledge to use the portal effectively, access invoices, and resolve issues quickly. Finally, schedule regular reviews to monitor performance, identify bottlenecks, and optimise your invoice distribution strategy over time.
FAQs on Types of Invoices
What are the different types of invoices?
There are many types of invoices used in business transactions, each serving a specific purpose. Understanding the types of invoices helps businesses manage compliance, automate processing, and reduce payment delays. Each type reflects different stages or conditions of a transaction.
What is a VAT invoice?
A VAT invoice is issued when goods or services are subject to Value Added Tax. It includes the supplier’s VAT registration number, the VAT rate applied, and the total VAT amount charged. These invoices are essential for tax reporting and reclaiming VAT in many jurisdictions. Businesses operating across borders often rely on VAT invoices to meet local tax compliance requirements.
What is 3-way invoicing?
3-way invoicing is a matching process used in accounts payable to verify the accuracy of a transaction. It compares the purchase order (PO), the goods receipt, and the supplier’s invoice. If all three documents match in terms of quantity, price, and terms, the invoice is approved for payment. This method helps prevent overpayments and ensures that only received goods or services are paid for.
Can I invoice without a PO?
Yes, you can issue an invoice without a purchase order. This is known as a non-PO invoice. These are common for ad-hoc services, consultancy work, or emergency purchases where a PO wasn’t raised beforehand. However, non-PO invoices often require manual approval, which can slow down processing. Organisations may set stricter controls for non-PO invoices to reduce risk and improve accountability.
What comes first, a PO or an invoice?
In standard procurement workflows, the purchase order (PO) comes first. The buyer issues a PO to the supplier to confirm the order details, quantities, and pricing. Once the goods or services are delivered, the supplier generates an invoice referencing the PO. This sequence supports structured approval processes and enables 2-way or 3-way matching for faster payment.
Conclusion
Understanding the different types of invoices is essential for managing financial operations effectively. But knowing what to send is only half the battle. Ensuring that invoices are delivered, received, and acknowledged on time is what truly drives cash flow, reduces Days Sales Outstanding (DSO), and strengthens supplier-buyer relationships.
If your business is facing challenges with late payments, missing invoices, or manual distribution processes, B2BE has the expertise and technology to help. We’ve worked with organisations across industries and geographies to streamline invoice delivery and improve financial outcomes.
Does this resonate with you?
If your business is struggling with late payments, missing invoices or manual distribution processes, it’s time to take a proactive approach.