What is an outgoing invoice

An outgoing invoice is an invoice that you send to a client when you’ve sold them a product or service.

When you sell a product or service to a client, and they don’t pay with cash or card at the time of delivery, you need to send them an invoice in order to get paid. The outgoing invoice documents the sale and requests payment from the client.

The opposite of an outgoing invoice is an incoming invoice, which is when you receive an invoice from your supplier. Usually we refer to both types of invoices as simply ‘invoices’. 

What should an outgoing invoice include? 

The invoice needs to have the following information: 

• The date the invoice was created, usually referred to as invoice date
• A unique invoice number
• The name of your business and your contact details
• The name of your client and their contact details
• A detailed description of what was sold, including quantity and unit price
• When and where the products or services were delivered.
• The total amount the client has to pay you, including discounts and consumption tax, such as VAT or GST, if applicable
• The due date for the payment
• The payment methods you accept, such as bank transfer or payment via PayPal or Google Pay

How to make the invoice

There are many ways to make an invoice—invoice templates, invoice generators, invoice pads—but the most reliable way to make invoices is to use invoicing software. It’s the best way to invoice your clients for several reasons: 

You enter your details the first time—your business information, your preferred payment method—and they’re automatically added to all your future invoices. Additionally, clients, products, and services are saved and can be reused so that you don’t have to spend time manually adding them each time. 

Also, all your invoices are safely stored in one place, and you won’t forget about outstanding invoices: You’ll be notified in the invoicing software and via email when an invoice is past its due date. 

What to do if your client doesn’t pay the outgoing invoice

An outgoing invoice that hasn’t been paid can be called an outstanding invoice or an overdue invoice.

There are several things you can do if the client doesn’t pay, such as: 

• Sending a payment reminder to the client. They might simply have forgotten to pay, and a payment reminder can ensure a quick resolution to the issue. 
• Adding late fees or interest to the invoice amount to encourage the client to pay as soon as possible. You should have sent an payment reminder before you charge late fees or interest, and you should also have included information about this in your contract and invoice.
• Look into debt collection measures. This is quite a serious step—and a debt collection agency will also charge you a fee for their service—so make sure that you’ve exhausted other options first.

See also: How to handle outstanding invoices