What is the main purpose of an invoice in business transactions?

The main purpose of an invoice in business transactions is to provide a detailed account of goods and services sold. An invoice acts as a formal document that outlines what has been purchased, the quantity of each item, the price, and any applicable taxes or discounts. This specificity not only aids in clear communication between buyer and seller but also becomes a vital record for both parties for bookkeeping and legal purposes.

By detailing what was sold, an invoice helps prevent disputes over the goods and services provided and allows the buyer to verify that they have received the correct items. Additionally, for the seller, it serves as a request for payment, integral to managing cash flow and accounting practices. Hence, the comprehensive nature of the invoice with respect to the sales transaction makes it an essential tool in business operations.