How to Create an Invoice

Photo of author
Written By Obaid Ur Rehman

Lorem ipsum dolor sit amet consectetur pulvinar ligula augue quis venenatis. 

Invoicing customers for your products and services is part of doing business. Here’s how to create an invoice to give to your clients.

  • An invoice is a record of all the work done for a client over the course of a time, together with the cost of each service.
  • Contact details, payment conditions, and occasionally other remarks are also found on an invoice.
  • Make room for a headline, include a thorough itemized table, and, if necessary, footnotes at the bottom when creating an invoice.
  • For company owners who wish to learn how to prepare an invoice for finished work, read this article.

Knowing the fundamentals of small company accounting can help you understand that just because you sign a new client doesn’t guarantee you’ll immediately get payment from them. The money in your company’s accounts receivable may not even reach your company’s cash account for several weeks or months. Additionally, you could never receive payment for your job if you don’t send invoices.

Since clients sometimes require receipt of bills to initiate their payment procedures, failing to deliver invoices might cause clients to pay you later than expected. Your clients can overlook or disregard payments without invoices to initiate their pay processes since they almost certainly record invoices in accounts payable as soon as they are received and pay in accordance with their internal pay schedule. Thankfully, mailing bills is simple. We’ll demonstrate how to produce an invoice in the sections below.

Also read: How to Create a Desirable Compensation Plan

What is an invoice?

An invoice is a detailed document that lists and describes the costs of each good and service a customer has purchased from your business over a specific time period. When your client receives your invoice, they have a certain amount of time to pay it according to your terms and conditions.

Small firms like yours would probably have a much harder job pursuing customer payments and obtaining them on schedule without invoices. Invoices serve as records of the job you did for a customer, and having this record on hand is helpful for bookkeeping, renegotiating terms with a client, and even if the IRS decides to audit your business. Invoices are another tool that your customers may utilize for bookkeeping and record keeping.

What is included on an invoice?

In your invoices, you should include the following:

  • the invoice’s creation date
  • The client’s name, address, contact information (phone, email), and the name of your business
  • a special identification or invoicing number
  • Payment schedules like “net 30” or a certain due date
  • a list that breaks down each item’s cost into its unit price, quantity, and overall cost
  • A starting total invoice amount that is obvious

How to create an invoice

Knowing what should be on your invoice is one thing, but making sure that your customers can comprehend it and use it effectively is quite another. Make sure your invoice is completely understandable by doing the following:

1. Add a header

The invoice date and contact details for both your business and your client should be included in the header of your invoice. Usually, the information about your company will be on the left and the information about your customer will be on the right, but occasionally, your information may be above your client’s.

2. Designate an invoice number or identifier

If this is your first time sending an invoice to a client, you can include “Invoice #0001” in the header (the extra zeros in the number prevent spacing changes if you reach thousands of invoices). Alternatively, you can use a service-related identification like “Invoice #2021Q1” or “Invoice #FEB2021,” etc. Even though your invoice identifier lists the time frame that your invoice covers, you need also mention the precise invoice date.

3. Insert your itemized table

Your itemized table of services and pricing serves as the main component of your invoice. Each item and its number, rate per unit (which might be a price per item or an hourly rate), and overall cost should be included here. You should total the costs of each line item in the table’s bottom right corner and enter that amount as the invoice’s total value. Either make sure this figure is bolded or display it somewhere else as the overall amount owed in a big, clear typeface. You may also be required to levy taxes in particular circumstances.

You can specify what the stated service entails as well as the date or time period each line item was supplied in your itemized table. By doing this, you may assist your client understand your job and cost better and perhaps even promote quicker payment. More than one itemized table can be used to make payment easier. One itemized table can be made for each location, for instance, if you are offering your customer services both on- and off-site.

4. Add footnotes

Invoices frequently contain self-explanatory lists of the services, items, and prices, but occasionally they don’t give the full picture. For instance, it might not be immediately obvious that you’re giving one of your line items a discount. Add an explanation footnote to the bottom of your invoice to explain this discount. By doing this, you may let your client know that similar services may be charged at greater rates in the future. Even without clarifying footnotes, you should still include a thank-you message with your invoice since even a small amount of appreciation may go a long way.

Invoice templates and generators

You may start producing your own invoices using a template or generator now that you understand how to produce them and have seen a practical example. Here are five possibilities:

  • There are 100 distinct invoice templates available from Invoice Home, ranging from simple layouts to those with more striking visuals.
  • You may download three invoice templates from Invoice Simple as Word, Excel, or other editable formats.
  • Microsoft provides a large number of its own downloaded templates for both Word and Excel.
  • Numerous templates in Word, Excel, PDF, and G Suite are available through FreshBooks.
  • Canva provides hundreds of fully editable invoice templates that strike a mix between simple information and cutting-edge styles.

Leave a Comment