how to create an invoice - women in business

How to Create an Invoice

You’ve got your first client, woohoo!  They’ve chosen your services and signed the contract, but now you need to send them a professional looking invoice to seal the deal.  A badly formed invoice is a huge tell tale sign of a novice, and while we all have to start somewhere, you don’t want to give this new client any reason to doubt that you’re going o knock their socks off with your service.  So let’s make sure that invoice is up to scratch!

When you break it down, all the components of an invoice are straight forward and really just common sense, but when you first start out in business it can be daunting creating one for the first time and you want to make sure that nothing is missed.

Here is an overview of all the components yous should include on your invoice:

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Now let’s break it down and look at each part in more detail.

The client’s name & address:

Of course you need to put down who the invoice is for.  Find out from your client what exactly they need to be put in this section, whether it should be the company name, a holding name or their name.  The address should be their registered business address.  This is not just so you can see who you sent the invoice to, but so they can prove the invoice was for them when it comes to doing their end of year accounts, this is why it’s crucial to check what they want it listed as.

Your company name & address:

For the same reasons, you need to list your company name and address.  This is so they can track who the invoice is from and so that HMRC can confirm the invoice is legitimate if need be.  Make sure you put your company name and not your own name (unless they are the same)

Invoice Number:

Imagine you were trying to speak to amazon customer services about a parcel you ordered, but there was no order ID to determine which package you were talking about – it would be chaos trying to figure out what’s what.  The same thing applies for invoices.  If you need to call and chase up on an invoice, it’s much easier to give an invoice number and have them find it on their system instantly, than to describe who you are, how much it was for etc.  Put an invoice number to make life easier for both sides. 

Note:  the invoice number can be whatever you want it to be, you don’t have to start at 0001 and make it obvious it’s your first one.  Maybe start at 2500 or something and increase from there for each invoice.

Invoice Date & Due Date:

The dates on an invoice are also very important.  The invoice date should be the day the invoice was created – i.e. the order date.  The due date is when you expect to be paid.  If you don’t offer credit terms then the due date should just say ‘Due Upon Receipt’.   But you may wish to offer 14 or 30 day terms (I don’t recommend offering longer than this if you are just starting out, see my article – Cash Flow is King)

The item/s and price

Of course you’ll need to list what the invoice is for and how much.  You can go into as much or as little detail as you like in the item section, as long as both sides can tell what it was for.  If you’re providing multiple products be sure to put the quantity in too!  At the bottom of the list of items, put a total amount due for the whole invoice.

Tax information (if applicable)

If you are VAT registered, be sure to provide the tax details here.  If you’re just starting out, chances are you wont’ be VAT registered, so you can leave this off the invoice entirely. (If you’re not VAT registered you don’t charge any tax on your products at all)

Payment Instructions

Believe it or not, this is the most common thing that people forget to put on their invoices!  It’s all well and good sending an invoice, but if you won’t end up with money in the bank if you don’t tell them how to pay you!

Getting Started

In the beginning you may just be sending the occasional invoice, but once things get going I highly recommend starting to use an accounting software such as Quickbooks or Xero as quickly as possible.  It’s good to get into the habit of tracking everything correctly, and it makes handing your finances a walk in the park.

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