Small businesses should learn how to make an invoice that’s professional and functional, in order to provide bills to clients that outline all the accounting details they need to pay you for your services. To make an invoice, small business owners should create a professional document that details the goods or services provided to the client, the amount owing, contact details for both you and the client and the payment due date.
How to Make an Invoice: Step-By-Step Guide
To make an invoice that impresses clients and gets you paid faster for work, follow this step-by-step guide for creating an invoice from scratch:
1. Create the Header of the Invoice
Create a header for your invoice that includes your business contact information. Add your logo, if you have one, and then list your relevant business information. Include the name of your business, the address associated with your company, your email address and phone number.
2. Include the Contact Information of the Client
Make sure to also include all the important contact details for the client you’re billing. Before you send out your invoice, confirm with your point of contact who the best person is to address the invoice to. Often, you’ll need to send invoices to the client’s billing department, rather than sending the invoice to your regular day-to-day contact at the company.
3. Number Your Invoices
It’s important that each invoice you send out to clients includes its own unique invoice number. That way, you can easily keep track of all the bills you send out to various clients, and your customers have a reference number if they ever need to speak with you about an invoice they received from your business. The easiest way to number invoices is to do so sequentially, starting with Invoice 1 for your first document, and working your way up with every new invoice you create.
4. Outline the Invoice Payment Terms
You’ll want to specify on every invoice you create the details of how and when you expect to be paid for your work. So before you start invoice clients, think through what payment terms will work for your business model. It’s common among small businesses and freelancers to follow a 30-day billing cycle, where the client’s payment is due 30 days after you send your invoice. However, for some business models where upfront material costs of a project can be expensive, you may request quicker payment, or even request an upfront retainer before completing the work. You also need to add details about the payment methods your company accepts, whether that’s cash, credit card, check, PayPal, etc. And if you plan to charge late fees if payments become past due, you should outline the terms of your late payment policy in this section of the invoice. That way, customers won’t be caught off guard if you do charge them a late fee.
5. Add an Itemized List of the Products or Services Provided
Your clients will want to have all the details of the work you provided for their files, so it’s important to break down that information clearly on your invoice. Most invoice templates include this information in an easy-to-read table, with different columns for the different pieces of information. The information you’ll need to include in the itemized breakdown is:
- A description of the products sold or services provided
- The date or time period covered in the invoice
- The quantity or hours for each product or service
- The rate for each product or service
- A subtotal of all items listed
6. Include All Applicable Taxes
As a small business owner, you’re responsible for collecting taxes from your clients on behalf of the government. The tax rate varies depending on your location and the type of business you run. If you’re unsure how much to charge clients in taxes, you can check with your local tax office.
7. Add A Footer Note
Consider leaving a friendly message at the bottom of your invoice to thank your customers for their business. It’s not necessary, but a simple thank-you message can help leave a good impression with your clients.