How to write an invoice in 5 simple steps (2024)

Whether you are a first-timer creating invoices or you’ve been in this game a long time, it’s important to understand how to write an invoice correctly. In this guide, we’ll show you how to create a professional invoice that will help you get paid on time.

You’ve set up a business and sold some goods or services. It’s time to send your first invoice! But how do you do that?

In this guide, you’ll find everything you need to know about invoicing and a step-by-step guide on how to write your first invoice.

We’ll also give you some free tools that makes the process easy, as well as some tips on how to increase your chances of getting paid on time.

Invoice meaning: What is an invoice?

An invoice (also referred to as a bill) is a document issued by a seller to request payment from a customer.

The document describes what the buyer has purchased and how the seller wants to get paid. It also includes details such as the name and contact information of the seller, a description of the goods sold, prices, and other payment information.

Some people believe that invoices and receipts are the same things.

That’s not true. An invoice is a document asking for payment, while a receipt documents that a payment has been made.

Example: If you go grocery shopping, you get a receipt after paying. If an electrician does a job at your home, you will receive an invoice for the work done, that you then have to pay.

See also: Invoice vs. receipt: What’s the difference?

Different types of invoices

The most common type of invoice is a sales invoice, which is used to request payments from customers.

In addition, there are other types of invoices, such as:

• Proforma invoice: A preliminary invoice used to confirm the details of a sale before the goods or services are provided.

• Recurring invoice: Invoices issued on a regular basis, such as monthly or annually.

• Past due invoice: An invoice that has not been paid on time and has therefore been resent to the customer (sometimes with additional charges).

• Credit invoice or credit note: A reverse invoice used to reduce the amount of money that a customer owes your business, mostly used to correct an error or when a customer returns goods.

Conta has free invoice templates that you can start using today.

What to include when you write an invoice: A brief checklist

These are the most important elements to include when you make an invoice:

• A unique invoice number
• Business information including your business name, address, phone number and email
• The name, address, phone number and email of the customer you’re invoicing
• The invoice date
• The due date
• A description of the goods and services you’re billing the customer for
• The amount due
• Payment terms
• VAT or GST, if applicable

Get started with free invoicing

Write an invoice, step by step

1. Make your invoice look professional

Using a spreadsheet or invoicing software, you can write an invoice that looks professional, preferably with your company logo too.

Remember to clearly mark your invoice with the word invoice, to improve the likelihood of getting paid on time.

See also: How to build a strong brand for your startup

2. Include company name and important information

Make sure that the recipient knows who sent the invoice. Also make sure to include the customer’s information on the invoice. In most countries, this is required in order for the invoice to be legally valid.

A quick tip: Invoice software, such as Conta, helps ensure all required fields are in place when you send invoices. Try Conta for free.

3. Remember to add dates

Dates give context to your invoice and serve as a point of reference if you need to follow up on unpaid invoices.

We advise you to include the following dates:

• The date the invoice was issued
• The date the goods or services were delivered
• The payment due date

Also, make sure to mention that late fees will occur if payment is not received on time.

4. Include a cost breakdown

Make sure that the customer knows what they are paying for by breaking down the costs: List the services provided, and the quantity and unit price.

Next, you will need to include the total sum of all goods and services without tax and discounts, any discounts, VAT or GST and the net total.

If you are using invoicing software, tax calculations are done automatically.

5. Save and send the invoice

There are several ways to make sure that an invoice gets to your customer:

• Email: You can send the invoice to the customer’s email. This is a fast and convenient option, but there’s a risk that the invoice could end up in the customer’s spam folder or be intercepted by third parties.
• Postal mail: You can send the invoice in the mail to your customer. This can appear more formal and professional, but it is also slower and more expensive than email.
• Online invoicing software: You can use online invoicing software to create and send invoices to your customers. This allows you to track the status of the invoice and whether it’s been paid. Some online invoicing software also let you to set up recurring invoices and automated payment reminders. Send invoices for free with Conta.

What to do when customers don’t pay on time

On average, 16 percent of small business invoices are paid late. That’s why it’s important to have routines in place to follow up on your invoices.

If a customer does not pay on time, there are some steps you can take:

1. Follow up with the customer: A polite reminder email or phone call might be enough to get the customer to pay.
2. Consider offering a payment plan: If the customer is unable to pay the full amount by the due date, you might be able to work out a payment plan to help them pay the invoice in installments.
3. Charge late payment fees: If you’ve specified late payment fees on the invoice, you can add this charge.
4. Take legal action: If the customer refuses to pay the invoice, you can consider taking legal action. This may involve hiring a lawyer or taking the customer to small claims court.

By following these steps, you can help ensure that you get paid on time and avoid issues with your cash flow.

See also: The ultimate guide to liquidity and cash flow

Best practices for invoicing

• Use a professional template: A well-designed invoice not only looks more professional, but also helps to clearly communicate the details and the terms of payment. You can use a template or invoicing software to create professional invoices. This also helps you build a strong brand.

• Use clear and concise language: Avoid using jargon or technical terms that your client might not understand. Use simple and straightforward language to clearly communicate the details of the invoice.

• Set clear payment terms: Specify the due date for payment and any late fees that may be applied. You might also want to include information about your preferred methods of payment, such as electronic bank transfer or credit card.

• Follow up on overdue invoices: If an invoice becomes overdue, it’s important to follow up with the client in a timely manner. This can be done through email or via the phone. Be polite but firm, and try to resolve any issues that may be preventing payment.

By following these best practices, you can improve your chances of getting paid on time and streamline your invoicing process.