How do I write an invoice?

You may be a new business owner who is wondering how to write an invoice for your first client, or a well-established business that has been sending out invoices for many years, though even if you are, a quick knowledge refresher from time to time can go a long way.

You may want to make sure you’re getting everything done correctly when creating an invoice, or perhaps just want to see if there’s anything you’re missing out on throughout the process.

Either way, our quick, handy guide will tell you everything you need to know when it comes to writing an invoice.

What is an invoice?

An invoice is a request for payment that businesses send to customers or clients. The request is requesting for payment of goods or services. Invoices will include a description of the items you’re charging for along with payment terms, VAT number, company name and address, amongst other information.

In regards to record keeping invoices pay an important role, businesses will need to retain them for six years to keep information about sales and income for tax and accounting in accordance to HMRC’s legislation.

Before we let you know all our tips and tricks to getting everything about an invoice right, you should be aware that are different types of invoices, for different situations. This is a recommendation from Gov.uk, so take their word for it as well as ours. Also, try to always make sure your customers are expecting an invoice before sending one their way.

Find all the details you need to know below:

Invoices – what they must include

There are numerous things which you must include on all of your invoices; we’ll now list these off for you to ensure you never leave out a key detail/feature.

The company name and logo

 This is a detail that can easily be forgotten, due to it being one of the most obvious inclusions on any invoice. By including your company name and logo on your invoices, you’ll add both a personal and professional touch to them, which will hep to keep up your brand reputation throughout your customer base.

Contact details and contact information 

Don’t forget to include those all-important contact details, not only for yourself, but also for your customer. That’s right, you need to list both your company’s contact details and your respective customers’ on all invoices you send out. Here you should list off the company’s name, the business’ address and the phone number and/or email address of the person the invoice is being sent to.

Your customer may well want to get in touch with you, so go ahead and include a copy of your own email and phone number as well. If you’re a limited company and want to include a director’s name on the invoice, you must then proceed to list all company directors within the invoice.

The invoice number

By numbering all the invoices that you send out, you’ll be able to keep track of them with a great deal of ease. Utilising a numbering system will be crucial to you for numerous reasons, such as if you’re faced with any disputes; you’ll always be able to easily identify what invoice has been sent out and where to. You can get inventive with your numbering system and create it in any way you see fit, though we would recommend keeping things as simple as possible in order to save yourself both time and conserve yourself some energy and effort.

You could number your invoices in terms of the date they’re sent out, making them even more identifiable and traceable if you should ever need to go through your backlog in order to solve any problems or resolve any disputes with customer, etc.

Dates

Again, this may seem like an obvious point to make, but it is also an extremely important one. You should include the date the invoice is being issued, as well as listing the date the payment will be due by. Make sure your due date is easily visible and noticeable, as this is the information you’ll need your customer to see right away. Consider making this information bold or underlined, whatever you think will help it to stand out and gain attention.

Payment terms

Do not solely state the date the invoice needs to be paid off by, also include information on how the payment ought to be made. You may wish to receive the payment via BACS transfer, a written cheque, or even by credit card payment, whatever method you’re wishing for them to use, make sure you let your customers know.

Bank details

As most businesses now pay via instant payments or BACS, it is important to add your bank details, this way the payee with already have your bank details in front of them when it comes to settling your invoice.

If your customer is overseas, its imports to include BIC or SWIFT Bank codes on your invoice, as this will allow them to make payment directly to your own business bank account.

The official breakdown

The largest chunk of your invoices will cover the breakdown of the of the job itself and the cost of that said job. Here you will detail the job or service that has been provided to your customer, along with a complete breakdown of the costs they need to cover for what they have received.

Be sure to make your information particularly detailed in this section of the invoice to avoid any future complications. This will also ensure the customer is aware of exactly what they’re paying for and exactly where the costs are coming from. This should include filling in all quantities and individual totals.

How to write a VAT invoice

It is standard practice to use VAT invoices if you’re VAT registered, although these types of invoices require further additional information when compared to a regular invoice. Therefore, there are certain things you may not be aware of which you need to know when it comes to writing a VAT invoice. We’ll take the time to fill you in with these extra details now.

You should note that there are indeed different types of VAT invoices which can be issued. A full invoice, a simplified invoice and a modified invoice. A modified invoice covers retail over £250 and a simplified invoice covers them under £250.

The information you’re required to include changes depending on the type of VAT you’re issuing. There’s a useful table on the gov.uk website that lets you know what information you should add depending on the invoice. Consult this table before rushing into any decisions yourself, as you don’t want to end up in a position where you’ve made a mistake and be viewed as less professional than you actually are.

Other than that, you’ll need all the same information that’s required to complete a normal invoice too, so don’t go forgetting the basics while writing out your VAT invoices.

Remember to include the following:

• your VAT registration number
• the tax point (time of supply) if it’s different than the invoice date
• the VAT rate and total VAT charged, if all the items are charged at the same rate
• if different items have different VAT rates, then show this for each one

How to send an invoice

When it comes to physically sending out your invoices, you’ll have multiple options at your disposal, so choose carefully and always think about convenience for both you and the receiver. The quickest and easiest way to send out invoices in this day and age is most probably directly through the use of email messaging.

You can attach your invoice to an email in a PDF format, but be sure to make certain that it is un-editable, so nothing can be changed without your permission. This should be the standard version of your files anyway, but try a few practise emails first to be doubly sure.

Beyond sending out your invoices, you can try and give the receiver a phone call, to ensure that they’ve got your message and that everything within it is displaying as it should. Also, if there’s no signs of payment being on its way, a phone call check-up can be a useful way to give a polite nudge to your customer when they need it.

There are certain business apps out there that allow you to send and manage invoices directly from your mobile phone. This could be worth looking into if you’re often busy with other areas of your work and are looking for ways to save additional amounts of time instead of sorting through your invoices manually each day.

Still need more information? 

Are you still wondering how to write an invoice? By reading through the content on this page you should be pretty much covered when it comes to writing future invoices for either a new business or an older pre-existing one. Though, if you’re in need of further guidance you can visit the official government website as we’ve linked to earlier in this post.

(Bonus tip)

It can be a great idea to make yourself some invoice templates, that way you can be ready to fire them out whenever you need to, either as an online invoice or otherwise. Finding an invoice software that works for you is a great way of making sure you’re prepared and ready to go as soon as you need to be, so be on the look out for one asap.

The Invoice Checklist

Now that you know what goes into an invoice, you are almost ready to start issuing them to clients. However, always double check to ensure that you’re including the most important information on your invoice before firing it off to someone.

Here is a quick list of the things you simply cannot afford to forget when sending out invoices. With that being said, this isn’t the limit for what you can send, if you have other well-informed ideas to utilise them include them also.

• The word ‘invoice’,so that it stands out from quotes or estimates.
• One unique invoice number
• All of your information — name, address and phone number
• All of the customer’s information — name, address and phone number
• The issue date of the invoice
• List of products or services provided, as well as the individual cost(s) of them
• The total invoiced amount
• Any taxes
• Payment terms and information
• Instructions on how to make payments

Invoice Factoring will Help Speed up the Payment

Once you have issued the invoice to your customer, you now have to wait 30, 60 or 90 days dependent on the terms you have agreed with your Client. You now just have to sit back and wait to receive the payment, this is where cash flow finance can assist, this type of business advance only will work if your deal with another business and not consumers.

Invoice Factoring is a type of business finance which releases cash currently tied up in outstanding customer invoices. This business solution is ideal for helping fund expansion plans, improving your cashflow and collect payment from your customers.

There are two main types of funding options: factoring and discounting. With factoring the factors provides both funding and credit control. Invoice factoring is simply a way to release the funds that’s tied up in your unpaid invoices. Instead of waiting for your customers to pay, you borrow against the money you’re owed and is a type of debt financing. Not only do you get the money you’re owed without the wait, we chase up your outstanding sales ledger for you with debt collection services.

Read more: Sell your Unpaid Invoices Today