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It’s essential for every business owner to know how to create a business invoice. Invoicing your customers is how you get paid for the goods and services your business sells. Proper invoicing helps you get paid more promptly and can prevent miscommunications between your company and its customers.
Key Points:
- An invoice is like a professional bill your company sends to other businesses
- Keep it clear – make your invoices easy to understand
- Work with your customers – find an invoicing method that works for you and your customers to keep things moving smoothly.
What is an invoice?
An invoice is an official bill that companies send to each other to request payment for goods and services. Typically, an invoice will include your company’s information, a description of the items you’re charging for, and how much you’re charging.
Invoices are important for bookkeeping purposes. Invoicing companies use them to track where their income comes from while the companies receiving invoices use them to track where they’re spending money.
What is included on an invoice?
An invoice needs to include a variety of information, including:
- The date of the invoice
- The name, address, phone number, and email address of both your company and your client
- A unique invoice number or identifier
- Payment terms such as net 30 or a specific payment deadline
- An itemized list with a unit price, quantity, and total price for each item
- A clearly started total invoice value
Make sure that your invoice is well-formatted and easy to read to avoid any confusion on your customer’s end. If they don’t understand a line item or have questions, it can take more time for your company to get paid.
How to Make a Business Invoice in 8 Easy Steps
You can make an invoice by following these steps.
- Add Your Logo. Your invoices should include your company’s logo near the top. This will help your invoices appear more professional and make it easy for your customer to identify which business sent the invoice.
- Include Your Business Information. Provide information such as your business name, address, location, and contact information.
- Add Your Client’s Contact Details. Include your customer’s contact info so that the customer knows the invoice was sent to them and not intended for another company.
- Include the Invoice Date. The date that the invoice was sent should appear clearly at the top of the invoice. Most invoice due dates are dependent on the date the invoice was sent.
- Specify the Payment Due Date. Specify when you expect to receive full payment for the amount of the invoice.
- List Your Services. Provide a list of all of the goods and services that you sold to your customer, including a short description for each. Also, note the price for each item included on the invoice.
- Add the Total Amount Due. After listing the price for all of the items on the invoice, list the total amount that your customer owes to you.
- Include Your Payment Terms. Note how you expect to receive payment, as well as special payment terms, such as 2/10 net 30, which offers a discount for prompt payment.
Professional Invoicing Tips to Get Paid Faster
Typically, payments for invoices are due thirty or more days after you send the invoice. However, there are some tricks you can use to try to receive payment sooner.
- Track Your Time. Keep track of how much time you spend on tasks as you complete them. This lets you build invoices quickly and easily instead of having to research your own work to determine how much to invoice.
- Invoice Promptly. Try to invoice on a regular schedule for recurring work or as soon as possible after you complete a service.
- Charge Late Fees. Adding late fees to your invoices can encourage customers to pay promptly to avoid mistakes and having to pay more than expected.
- Accept More Payment Types. If possible, try to accept additional forms of payment such as electronic transfers or even credit cards. The easier it is for your Allow Automatic Payments. If you can automate any part of the invoicing process, that can save you a lot of time. If you send recurring bills to customers, see if they can set up automatic, recurring payments.
Business Invoice Example
Here’s an example of a business invoice.
Use an invoice template
One of the secrets to good invoicing is to use a good invoice template. A good template makes it easy to build new invoices that look professional and contain all of the information that your customers need.
The good news is that there are many different invoice templates that you can use. There are also invoicing programs that you can use to quickly generate invoices for your business.
A very basic strategy is to use a spreadsheet program to generate an invoice, using the program to find the sum of the costs of all the goods and services you sold.
How to Create an Invoice in Google Docs
Google Docs is one easy way to create invoices. It requires no specialized software, just a computer and a web browser.
To use Google Docs to create an invoice, follow these steps:
- Log in to your Google account and go to your Google Drive.
- Click the “+ New” button and scroll down to Google Docs in the drop-down menu. Click the arrow next to it and select “From a template.” This brings you to the templates page.
- Type “invoice” in the search bar on the templates page. A selection of invoice templates should appear in the results. Review the choices and select the best invoice template for your business.
- Fill out the new page with the template you selected. This includes custom entry fields with things like company name, address, phone number, email, logo, payment terms, and official payee name for receiving payments.
This strategy will let you quickly make professional-looking invoices that you can email to your customers.
How to Send an Invoice
You can send invoices to customers in a few ways.
One of the most popular is email. Most businesses do most of their bookkeeping and paperwork using computers, so emailing invoices is a natural thing to do. Your invoices will arrive immediately, and it’ll be simple for customers to pay electronically.
One unusual option is to send invoices through text. This is usually used by less formal companies that are doing smaller jobs. If you’re expecting to get paid using a money transferring app, this might be the way to go.
If you send invoices on a specific schedule or have recurring invoices that you send to customers, consider setting reminders or automating the process where you can. The more consistent you are with sending your invoices, the easier it will be for customers to predict their arrival and pay them promptly.
Tips When Writing an Invoice
When writing an invoice, follow these tips.
- Make sure it looks professional. A professional-looking invoice is important because it can boost your business reputation and encourage faster payment.
- Use and customize an invoice template. Customize a template for your company and use it for all invoices. This will ensure they all look the same and help you send invoices with less effort.
- Include the invoice # in the subject line and any important information. Adding the invoice number to the subject line of any emails about it makes it easy to search for relevant emails down the road.
- Keep a record of all invoices (especially outstanding ones). Keep track of every invoice you send and pay close attention to ones that have not been paid yet. Invoicing software can help here.
- Follow up. Follow up on unpaid invoices regularly to ensure your customers pay you what you’re owed.
Frequently Asked Questions (FAQs)
As a business owner, it’s important to understand the many different aspects of creating business invoices.