By the time you’re reading this article, you’ll be armed with great tips and tricks concerning how to make a billing invoice . Now, we all know that we’re supposed to provide the best possible services in order to attract new clients, and this is definitely what it takes in order to stand out. The truth is that in the grand scheme of things, no matter what type of company you run and in which sector it operates, everything will always boil down to keeping your customers satisfied. Since this is generally easier said than done, the only way you can stop worrying about this issue is by doing everything in your power to focus on offering excellent service and meeting all expectations for their satisfaction.
What is an invoice?
An invoice is a bill that businesses send to customers or clients, asking for payment for goods or services. Invoices usually include a description of the items you’re charging for along with payment terms, amongst other information.
Invoices are an important part of bookkeeping, as businesses need to keep information about sales and income for tax and accounting.
Invoices are different to receipts (which acknowledge payment) and purchase orders (which notify intent to buy goods and services).
Download your free invoice template
This article explains how to make an invoice, but what about getting an invoice example you can use straight away?
Below you’ll find a pack of four invoice templates that you can use to create your own professional invoices. Our template pack includes editable invoice templates for limited companies and sole traders – both with and without VAT.
Get your free invoice templates
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How to create an invoice: step-by-step
Wondering what to include on an invoice? Gov.uk says that there’s certain information that your invoices must include – follow the steps below to get your invoices up and running in no time.
1. Make your invoice look professional
The first step is to put your invoice together. You can do this yourself using a word processor or Excel, but you could also use one of our free invoice templates above.
There may even be sample templates on your word processor, depending on the program you’re using.
You should use professional fonts and styling that match your brand, then add your logo and colours if possible.
2. Clearly mark your invoice
Make sure your customers know it’s an invoice they’re receiving. Just adding the word invoice at the top of your document might make it more likely you’ll be paid on time, as it makes your request for payment stand out from other documents your client might get.
The guidelines on the gov.uk website also state “you must clearly display the word ‘invoice’ on the document.”
Your invoice needs to have a unique identification number. This is for your records, as you should have a reference for all the invoices you’ve raised to make sure you don’t create duplicates.
You can use a sequence of numbers that gradually increases. You could also use letters in front of a number, which might indicate a specific client.
3. Add company name and information
This means both your company’s information and the details of the company you’re invoicing:
- your company’s name, address, and contact details
- your customer’s company name and address, including a contact’s name so it reaches the right person
- your registered office address and company registration number if you’re a limited company, along with the formal registered name
Keep in mind that if you’re a limited company and you choose to add the names of your directors on the invoice, you need to add the names of all directors.
4. Write a description of the goods or services you’re charging for
These descriptions don’t need to be long, but they should be detailed enough for your customers to know what it is they’re paying for.
After all, if they have no idea what they’re being charged for, they’re more likely to query the invoice – leading to a delay in payment.
Once you’ve added a clear description of each item, you should add in the quantity of each and the price.
5. Don’t forget the dates
You need to add some dates to your invoice. These are:
- the date you provided your goods or service (the supply date)
- the date you create the invoice
You could add the supply date to the description of your goods or service, and add the invoice date at the top along with your name, address, and contact details.
6. Add up the money owed
As well as including the costs of individual goods or services, you need to put the total amount owed as well.
Plus, if you’ve agreed a discount with your customer, note this down on the invoice and subtract it from the total cost.
If applicable, include the VAT amount too.
7. Mention payment terms
You should have agreed payment terms with the customer beforehand, but it’s a good idea to note the terms of payment on the invoice as well.
So if you expect to be paid within a certain number of days, remind the customer by including it on the invoice.
More importantly, note down how exactly your customer should make the payment. It’s likely you’ll want the customer to make the payment directly to a bank account. If that’s the case, be sure to add your bank details.
Including clear payment terms – as well as making it easy for customers to pay you – should help with your business’s cash flow, as it encourages quick payment.
If you’re looking for a bank, here are the best business bank accounts as voted for by businesses themselves.
Issuing VAT invoices
Gov.uk says that you should use VAT invoices if you’re VAT registered. These invoices need more information on them than normal invoices.
There are different types of VAT invoices you can issue – a full invoice, a modified invoice for retail supplies over £250, and a simplified invoice for supplies under £250.
The information you need to include depends on the type of VAT invoice you’re issuing. There’s a handy table on the gov.uk website that lets you know what information you should add depending on the invoice.
In general, though, they need the same information as normal invoices, plus:
- 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
The quickest and easiest way to send your invoices is by email. You can attach your invoice in an un-editable PDF format (to prevent fraud) and include a clear, brief description of your business and invoice in the subject line and body of the email.
Different customers and clients might have different processes on receiving invoices. It might be a good idea to find out whether there’s certain information to include in the subject line that’ll help you get paid faster.
After you’ve sent an invoice, you could choose to give your customer a phone call to check they’ve received it – and if the payment isn’t forthcoming, you can politely nudge your customer.
Alternatively, there’s software that can take the hassle out of sending invoices. In some cases, you can create and send invoices directly from a mobile app – more on those below.
What about invoice software?
Above, we’ve provided a selection of free downloadable invoice templates that you can edit yourself. You can use these to take the stress out of creating your own invoices from scratch.
If you want to know how to make an invoice yourself, you can also have a look at our list of the best invoice apps for even more invoice template options.
Plus, some digital-first and mobile-only banks can even create and chase invoices for you, taking the hassle out of record keeping. Have a look at the best business challenger banks.
Conclusion
For many people, creating a billing invoice is one of the most difficult aspects of their jobs. A billing invoice is an important piece of financial documentation that helps you keep track of your company’s earnings and expenses. It can be used as a tool for figuring out how much profit your company makes each month, quarter or year. By creating a billing invoice, you can more easily manage your income and expenses for tax purposes.