From the blog How to Write an Invoice: Step by Step
Whether you’ve just made a sale, completed work, or have a job coming up, learning how to write an invoice is an essential skill for every small business owner.
Creating detailed, professional invoices (and sending them promptly) is a win for you and your customers. It lowers the likelihood of late and forgotten payments or disputed charges, putting you one step closer to positive cash flow. Plus, your customers get the clarity they want on payment options—and the best invoices offer even more value.
Below, we’ll cover what you should include in an invoice, do’s and don’ts of creating invoices, and options for sending them.
What is an invoice?
An invoice is two important things: a record of the goods or services you provided (or will provide) to the customer, and a notice that payment is owed.
Important note: A purchase order is not an invoice. A purchase order is created by the customer to order goods or services from the supplier.
Invoices are often confused with purchase orders, which are actually created by a customer in order to purchase goods or services from a seller. Invoices are also different from other transactional documents like statements (a summary of all invoices due), order confirmations and receipts.
Follow the quick tips below to see how to write an invoice that works for your business.
How to write an invoice that works
Basic invoices include full contact information for the seller and buyer, details of the goods or services sold, the amount owed, and payment due date.
You might think this gets the job done, but the more detail you add to your invoice, the better. Not only will you avoid accounting headaches down the road, but your customers will thank you.
It’s your choice whether to write your invoices by hand, in a document or spreadsheet, or using online invoicing software, but professional invoices should have the following details.
What you should include in every invoice
Use the following checklist to start invoicing your customers in no time, whether it’s your first invoice or a much-needed overhaul.
1. Invoice number
Assign each invoice an invoice number to stay organized. Many small businesses order their invoices numerically (e.g., 0001, 0002, 0003) or using a combination of numbers and letters (e.g., HD001, for a client named Hello Design).
2. Your business’s contact information
Include the business name, mailing address, phone number, and email address. If you have a company logo, add it to your invoices for another professional touch.
3. Your customer’s contact information
Include their first and last name, phone number, billing address and their shipping address, if applicable.
4. Invoice date
Add the invoice date, i.e., the date you sent the invoice to the customer. (You’ll also use this date to calculate the customer’s payment due date.)
5. Goods or services costs
This is one of the most important opportunities to answer your customers’ questions about charges before they arise (and track your business expenses). Best practice is to itemize the total amount due into separate line items.
Create a table with columns, then list the following:
- The name of the good or service
- The quantity
- The cost or rate (if you charge hourly)
- The hours (if needed)
- The date the work was performed
6. Amount due
On its own line, add the subtotal: the amount you’re charging for all goods and services before sales tax (and any other taxes). Then add the total amount due on its own line.
7. Payment terms
Add the forms of payment you’ll accept (direct deposit, check, credit cards, etc.) and how you’ll accept payment (such as payment required on delivery or payment plan options). If you have restrictions, it’s vital to use clear language (e.g., CASH ONLY).
8. Payment due date
“Net 30” is a commonly used payment term to represent the payment due date. This means that the net amount of the invoice is due within 30 days. If you choose to use the “net” term, it’s still a good idea to write out that payment is required within 30 days of receiving the invoice—or even add the actual date.
Want to encourage customers to pay sooner? One strategy is to do a 2% net 10, meaning you’ll offer a 2% discount if you receive payment within 10 days.
9. Late payment policy
Small businesses owners want to know how to write an invoice that gets paid on time—and a reliable solution is to prominently display your late payment policy on the invoice. It’s also another great way to protect your business from chargebacks.
(Optional) Marketing and promotional offers
Today’s consumers are flooded with emails, mail offers and robocalls. Invoices are often one of the few messages that are heard loud and clear. For a few minutes, you’ve got the floor. Use the opportunity to offer value—try offering a discount off their next order or highlighting seasonal promotions.
Best tips for invoice writing
Keep these tips in mind as you’re writing.
1. Polite language goes a long way.
Yes, you’re requesting payment, but as small business owners know, a successful business is built on positive, helpful interactions.
2. Presentation matters.
Choose a font that’s easy to read online and in print. If you add images, make sure they’re a reasonable size, the right color, and good quality.
3. Stick to one page when possible.
Don’t make it difficult for clients to find information.
5 invoice writing mistakes to avoid
Before finalizing any invoice, check your template for some common invoicing mistakes with big consequences.
- Unclear payment terms
- Incorrect contact information
- Spelling & grammar mistakes
- Non-itemized costs
- Creating only one copy of each invoice
3 ways to create your invoices
We’ve covered how to write an invoice, and now it’s time to build it. You can create your main invoice template from scratch, but there’s no need—there are tons of free invoice templates online. Here are your options.
If you don’t need to create invoices often, this works. You can download an invoice template made with tools like Google Docs, Google Sheets, Microsoft Word, Microsoft Excel, or PayPal, print it out, and fill it in.
2. Word processor or spreadsheet
Another option is to download a template (or start from scratch) and type in the details. You can choose between an online tool like Google Sheets and access your files anywhere, or try desktop software like Microsoft Excel, which saves your invoices locally.
3. Online invoice software
While paper invoices, web-based tools, and desktop-based software leave you constantly looking for customer details, invoicing software keeps all the information in one place. We’ve written before about why small businesses should avoid using pen and paper or spreadsheets to manage finances. QuickBooks, FreshBooks, and Invoice Simple are popular options for simplifying the invoicing process even further—many even send automated payment reminder emails.
Sending your invoices
Once you’ve done the above, you’re ready to send your first invoice (or optimize your current invoice template).
You can either mail, email or digitally send invoices—decide which method makes sense for your small business and your customers. For example, if the majority of your customers pay with a credit or debit card, you should choose a solution with online payment.
1. Print and mail invoices.
This is the traditional method of sending invoices, but it takes more time to reach your customers. It also makes secure credit card payments challenging.
2. Email invoices (with or without a payment link).
One analysis estimated that electronic invoices can result in savings of 60–80% compared to traditional paper-based processing. Add key details to the email body text and attach invoice PDFs. You can even add a payment link if you have an e-commerce solution.
3. Send with online invoicing software.
This is another moment when invoicing software, like QuickBooks or FreshBooks, is really helpful, because everything you need to send invoices is already organized. Online payment is built into these tools as well.
How to optimize your invoicing (and get paid faster)
Small businesses depend on reliable cash flow. If you’ve been using the same invoice template or invoicing system for a while and late payments are plaguing your business, consider changing it up using the above tips—or try a payment processing solution that makes it easier for your customers to pay quickly.