The Journey of a Document: Exploring Its Life Stages in Detail

You create a sales invoice after completing a project for a client. The invoice includes the services provided, the agreed-upon price, payment terms, and due date.

You store the sales invoice in a designated folder within your digital system, such as “Invoices” or a client-specific folder. The invoices are automatically organized by date, client, or invoice number while using an invoicing software.

Since this is a finalized invoice, there’s no need for multiple versions. However, if any changes are made (e.g., a correction or update requested by the client), you ensure that both the original and updated versions are clearly labeled and saved.

To protect sensitive client and financial information, you make sure that the invoice is stored securely. This could be through password protection in your file system or using invoicing software with encryption.

You, your business partner, or your bookkeeper should be access the invoice at any time, to monitor payment status. If you use invoicing software, it’s easy to view the invoice, track whether the client has seen it, and check for payment updates.

The invoice is sent to the client for payment. In a small business, this can be done directly through email or via an invoicing platform. If the client requires a paper copy, you print and mail the invoice, but in most cases, digital distribution is quicker and more efficient.

You will be tracking of deadlines for payment, once the invoice has been sent. If the client is not paying and the due date has passed, you can easily retrieve the invoice to send a polite follow-up reminder or set automatic reminders if using invoicing software.

After creating the invoice in your preferred software (such as a Word document or Excel spreadsheet), you may convert it into a PDF format before sending it to the client. Converting the invoice into PDF ensures that it is non-editable and maintains consistent formatting across different devices.

If your client’s accounting system requires a specific file format, such as CSV or XML, you can convert the invoice to meet their system’s needs. This ensures smooth integration with their software without manual data entry.

Since a paid invoice is no longer actively needed, you will convert it into a long-term storage format, such as PDF/A. This is a format that is designed for archiving and ensures that the document remains accessible and readable years later, even as software evolves.

For small businesses, you must retain sales invoices for a period determined by tax laws or financial guidelines. In many cases, this retention period ranges from 3 to 7 years, depending on the country’s legal requirements. You must keep the sales invoice in an accessible form for the duration of the retention period to provide records for audits, tax filings, or potential disputes.

During the retention period, you store the invoice in a secure and easily accessible location. If you use digital storage, this could be a cloud-based system or invoicing software that keeps everything organized. If you are storing physical copies, make sure its stored in a secure, locked location. Regardless of storage format, it’s important to periodically check that the document remains intact and accessible.

Once the retention period ends, the invoice becomes obsolete. You can safely delete it since it is no longer required for reference, audits, or legal purposes.

You must securely delete all digital documents from every system, including backups. This may involve permanently deleting the file from your cloud storage, invoicing software, and local devices. Use specialized software to permanently erase the file, especially if it contains sensitive client information, to ensure it cannot be recovered.

Since the physical copy of the invoice is no longer needed, destroy it to prevent unauthorized access to confidential financial or client information.