Debit Note vs. Invoice

Debit notes and invoices are used in the accounting process to help businesses track sales. While debit notes deal with accounts receivables, invoices deal mostly with completed sales in which money has already changed hands. Whether a debit note or invoice is used, it's important that all pertinent information be included on the document so it can be used in the accounting process in the future.

A debit note is a notice sent to a customer to alert her of a past-due amount. Businesses may use a debit note as a precursor to sending overdue accounts to collections, as an alert that an account is about to become past due, or to remind a customer of a discount for early payment.

Invoices are used to record sales transactions. For example, if a business is at an expo or conference and makes a sale, the purchaser and business each receive a copy of an invoice so both parties know what was sold, when and for how much. Invoices are also included with sales items that are shipped to customers.

A debit note is information regarding a past transaction that remains unpaid, whereas an invoice records a sales transaction that has been completed. Debit notes are based on accounts receivable accounts, while invoices are used for sales for which payment has already been made.

If a customer's account is past due, a company can send a debit note to the customer to remind him of the oversight on the account. The note should include the item or items purchased, the date of the purchase, the purchase price, the original payment due date and any finance charges that might have been applied to the past-due account. An example of an invoice is when a sale is made and the customer requests an itemized receipt. The invoice includes the item purchased, the sale price, the date of the sale and the method of payment.