How to write an invoice (with definition, steps and tips)

By Indeed Editorial Team

Published 3 June 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Keeping accurate and verifiable accounting records can help organisations manage their finances to enjoy success. For that reason, companies often use complete, professional-looking invoices to help customers understand the products or services they’re paying for and expedite payments. Learning how to write an invoice can help you guide an organisation through how to request, receive and monitor payments from customers and clients. In this article, we define what an invoice is, explain how to write one, list its essential components, and provide tips to help you write your own.

What is an invoice?

An invoice is a document that organisations give customers or clients to request payment for services or products. It describes what the organisation delivered, the cost of the goods or services, how much the recipient owes, the date payment is due and the acceptable payment methods. The business can send invoices on a specific schedule, such as weekly, monthly or semi-annually. It can also send invoices after completing projects. Invoices are often essential components of bookkeeping, as businesses use invoices to manage sales and income information for accounting and tax purposes.

Related: Guide: what is bookkeeping and what do bookkeepers do?

How to write an invoice

Here are the steps you can use as a guide to writing an invoice:

1. Have a professional layout

You can create an invoice by downloading invoice templates to your computer or by using an online invoice generator with a pre-built design. The online invoice generator can be a straightforward option because these often require few modifications. It’s helpful to place the business’s name and logo at the top of the page in a large font. In addition, using professional fonts, colours and styling to match the brand can help recipients recognise the invoice and the company's professionalism. When recipients embrace the professional layout, they may expedite the organisation's payment and anticipate more business with the enterprise.

2. Include company and client details

It’s important to include the billing company's name, address and contact information. Customers may want to review the organisation's details to contact them if they have concerns or questions. Happy clients can also use the contact information when referring the company to others. It’s also important to include the customer's name and address to ensure the invoice reaches the right individual. If the customer's service address differs from their mailing address, you may want to include their service address on the invoice too.

If it’s a limited company, you may include the registered office address, formal registered name and organisation registration number. For limited companies, you typically add the names of all directors if you choose to add them to the invoice. Consider whether adding the names of the directors is essential because adding several names to an invoice can affect its appearance.

3. Add an issue date, a due date and a unique invoice number

You can add a unique invoice number to the invoice to help you maintain proper records. This unique number often ensures you have the necessary copies of the invoice, helps identify it when discussing it with a client or colleague and helps with retrieval. It’s beneficial to use a sequence of numbers that increase gradually. You can also use letters before the numbers to specify the customer. The issue date highlights when the company sends the invoice, while the due date indicates when the organisation expects the client to pay. Including the due date can help the customer pay quickly.

4. Write each line item with a brief description of the services

A line item describes each product or service an organisation provides and its prices. In a column beside the line item, you can add quantities or QTY to highlight the labour hours, material quantities or other units. It’s important to name and describe line items clearly, so customers know what they’re paying for. For example, you can write Chafer Grub Control or Crabgrass Control rather than Lawn Treatment. You may also include the materials or product names. Descriptions underneath the line items can help customers understand how the service or product uses each component, helping them pay faster.

5. Add the line items together for the total amount the client owes

Once you price each line item, you can add the costs together and write the sum near the bottom of the invoice. Some invoice templates or software can calculate the total amount for you automatically. After, you can determine taxes, service charges or any discount pricing experienced when providing the product or service. Once you have the full amount owed, you can write it on a distinct line. It’s helpful to bold or highlight the total amount to make it noticeable.

Related: What is accounts receivable and why do businesses need it?

6. Include payment options and terms

Payment terms are the guidelines for how the organisation collects payments. You can include the company's payment terms on the invoice to ensure the client understands the company’s position. It also helps to discuss the payment terms with the client before providing the goods or services to make sure they accept the terms. The payment details you can include at the bottom of the invoice are as follows:

  • the total amount due, with any applicable sales tax

  • the payment due date

  • late payment policy and fees

  • any service warranties or money-back guarantee

  • a list of accepted payment methods, like cash, cheque, bank transfer, debit card or credit card

7. Add a personal note

It’s often important to thank the client for their business in a brief message at the bottom of the invoice. You can also request reviews and feedback, summarise the company's referral program or preview an upcoming seasonal deal. The customer may appreciate the organisation's acknowledgement of their business and check any additional information on the invoice. A happy client often pays the amount faster, considers the company for future deals and recommends it to others.

Related: Incentive programme benefits: advantages and examples

8. Review your invoice

It’s typically important to verify all information on the invoice is accurate. You can review your grammar, spelling, listed products, calculations and quantities to confirm their accuracy. If the organisation is invoicing a new customer, you can also verify where to send the invoice. Having accurate details and delivery information can ensure the invoice reaches the correct recipient, and the client pays quickly.

9. Get authorisation

The organisation's policies can require you to seek authorisation from a supervisor before sending the invoice. The approval can be your signature or the manager's signature. For example, if you need clearance from a senior person in the organisation, you can send the invoice to the individual when there's adequate time for them to review and return it. Once they approve it, you can send the invoice to the customer and follow the organisation's protocol for invoice processing.

What to include on an invoice

Here's a list of information to have on an invoice:

  • the word 'invoice'

  • a unique invoice number

  • the organisation's complete information, including name, address and contact information

  • the client's comprehensive information, including name, address and contact information

  • the invoice date

  • a list of services or products provided and their costs

  • the total invoiced amount

  • taxes (if any)

  • payment terms and information

  • payment instructions

Tips for writing an invoice

Here are some tips to help you write an accurate and reliable invoice:

Have a checklist containing all the essential information to include on invoices

Compare each invoice's details with the checklist to ensure you've captured all the critical components. While some invoices may differ, most have the same elements. The list helps ensure each invoice the organisation sends has the crucial details to facilitate quick payment.

Be consistent

Use the same numbering system, descriptions and formatting for easy identification, interpretation and retrieval. Companies can engage professional designers to ensure they have an invoice layout they can use for long periods. They may also customise existing templates and use them. Clients often appreciate a professional, consistent design and may pay the company faster.

Related: How to learn graphic design with tips for success

Have thorough records

Develop a process for storing, tracking and securing the invoices to document payment requests, manage payments and update accounts. You can engage a records manager to make the invoice records system efficient. If accessing a records manager is challenging, you can preserve the invoices by storing them in reserved, accessible locations.

Consider having a digital invoice system

Research invoice software or check the organisation's current financial program to determine if it has invoice creation and monitoring. Digital invoices can make the invoicing process more accurate, efficient and secure. For example, the setup may require a password to access it, use the internet to relay invoices quickly and have an arithmetic system to ensure the invoices are accurate.

Have recurring invoices

If the organisation offers recurring services, you may use recurring invoices. It’s helpful to determine when to send the invoice, such as monthly, and set up the invoicing software to send the invoice. Recurring invoices can suit organisations that deliver invoices with fixed client payments.

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