As a small business owner, it is essential that you find a fast and efficient way to charge your clients and customers for the products and services you supply.
The best way to do this is via an invoice – and as such you’ll need to know how to write a simple and streamlined invoice. An invoice doesn’t have to be complicated, but there are some essential items you’ll need to include. It should clearly outline the details a customer needs to pay you the correct amount on time.
If both you and your customer are VAT registered then issuing invoices is a legal requirement, but even if you aren’t it remains good practice to create, store and track invoices.
By invoicing clients and keeping a record of payments, you will not only make it easier to get paid on time but will look more professional and get a head start when it comes to submitting accurate accounting and tax records.
Invoices should feature your business name and address. You can also include a business logo – this is an optional extra but brings an aura of professionalism to your document.
As well as your details, an invoice should feature the following information about your client: their name or company name, their address, and – if relevant – the contact you deal directly with.
In order to allow both you and your client to keep track of payments, you should include details relevant to the specific invoice.
This includes a unique invoice number, the date of the invoice, a payment due date, and – potentially – a reference relating to the project or work you are invoicing for.
Your invoice should provide a clear breakdown of what you’re charging for, including your rates, and the quantity of any items (or hours) you’ve provided. You should also include a line total for each item.
All of these details how to make your invoice easy to understand, and therefore to pay. This mantra should translate into how you lay out your overall charge. You should include a subtotal, any applicable taxes and discounts, and then a clear ‘grand total’.
In this section, you should detail exactly how your client should pay you. This could feature your bank details, PayPal or any other relevant payment method. You should then outline your payment terms and conditions, including – as relevant – a due date, payment terms (‘Payment due within 14 days’), and any late payment fees.
[Your Name/Business Name]
[Address]
[Email Address]
[Phone number]
Invoice number: XXXX
Invoice date: XXXX
Payment due date: XXXX
Bill to:
[Client/contact name]
[Client company]
[Company address]
Description of work Quantity/Hours Rate Total cost
---------------------------------------------------------------------------------------------------------
Creating of invoicing template 1 hour £50/hr £50
Subtotal: £50
VAT 20%
Total due: £60
Payment instructions
[Your Bank Name]
[Your Account Number]
[Your Sort Code]
If your head is still spinning over the process of creating invoices or you’re looking to reduce the amount of administrative work you’re doing, there are automated systems which can produce, and even send out, invoices on your behalf.
Accounting software such as Sage, Xero, or Quickbooks come with inbuilt invoicing capabilities, making it easier to create, send and track invoices.
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