Invoicing & Tax Glossary
Clear, accurate definitions of the terms you'll meet in invoicing, VAT, payment terms, and international billing. Written by people who ship invoices every day.
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3 termsCFDI
Mexico's mandatory electronic invoicing format, issued through authorised providers (PACs) and validated by the SAT tax authority.
Commercial Invoice
An invoice issued for international shipments, used by customs authorities to assess duties, taxes, and clearance.
Credit Note
A document issued by a seller to a buyer reducing the amount owed on a previous invoice — used for returns, discounts, or corrections.
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2 termsDebit Note
A document issued to increase the amount owed on a previous invoice or to request additional payment — the mirror image of a credit note.
Dunning
The process of methodically pursuing payment from customers whose invoices are overdue, typically through a sequence of escalating letters.
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2 termsE-Invoicing
The issuance, transmission, and storage of invoices in a structured electronic format that can be processed by software, not just read as a PDF.
EORI Number
A unique EU identifier for any business importing into or exporting from the European Union, issued by the customs authority of the member state.
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3 termsFactoring
A financing arrangement in which a business sells its accounts receivable to a third party (factor) at a discount for immediate cash.
Fapiao
China's government-issued tax invoices, produced through the state Golden Tax System, the only document that lets buyers claim input VAT.
Fattura Elettronica
Italy's mandatory electronic invoice, transmitted via the state-run Sistema di Interscambio (SDI) for B2B, B2G, and B2C transactions.
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2 termsGross Margin
The percentage of revenue remaining after subtracting cost of goods sold — a key indicator of pricing power and unit economics.
GST (Goods and Services Tax)
A consumption tax similar to VAT, used in India, Australia, Canada, New Zealand, Singapore, and other countries as an alternative to VAT.
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2 termsIncoterms
Standardised 3-letter trade terms published by the ICC defining the responsibilities of buyers and sellers in international shipping.
Invoice
A commercial document issued by a seller to a buyer listing goods or services supplied, quantities, prices, and the amount owed.
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2 termsNET 30
A payment term meaning the full invoice amount is due 30 days after the invoice date, with no early-payment discount.
NF-e (Nota Fiscal Eletrônica)
Brazil's mandatory electronic invoice for the sale of goods, authorised by the state tax authority (SEFAZ) before the goods ship.
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3 termsPeppol
An international, standardised network for exchanging structured electronic documents — especially e-invoices — used in 40+ countries.
Pro Forma Invoice
A preliminary invoice sent before a sale is finalised, stating the goods, terms, and total so the buyer can commit to the purchase.
Purchase Order (PO)
A document issued by a buyer to commit to purchasing goods or services at agreed quantities and prices — the buyer's equivalent of an invoice.
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2 termsRemittance Advice
A document sent by a buyer to a seller stating which invoices a payment covers — useful when a single payment settles multiple invoices.
Reverse Charge
A VAT mechanism that shifts liability from the seller to the buyer, who self-assesses the VAT on the transaction.
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1 termsInvoice in any language, any currency, any compliance regime
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