While invoicing might not be the most glamorous part of running a business, getting it right is one of the best ways to improve cash flow by ensuring that customers pay your business the correct amount and on time. A professional and well-formatted invoice can also help build credibility for your brand and avoid any misunderstandings with payment terms.
If you’re unsure what elements to include on an invoice or how it should be formatted, then Sage has put together a useful guide to the elements that should be present on every invoice and an invoice template.
What should be included in an invoice?
- Identifying your invoice by stating ‘Invoice’ on the document will ensure it's not mistaken as a quote, credit note or receipt.
- A unique invoice number is also essential on each invoice to ensure that neither you nor your customer mistakes it for a previous invoice.
- By including contact details on your invoice, you make it clear who you are and encourage your customers to discuss any issues they have immediately.
- Including the details of the company, you’re billing will ensure that the correct person picks it up and that you have accurate details for them.
- Your invoice should also be clear on the goods and services the customer is being invoiced for, including the quantity and amount due. Each item or service should be on a different line.
- Include the date of supply, so they know when the goods or services were issued.
- Including the date the invoice was generated will help your customer keep to payment dates. This date may be different from when the goods were supplied.
- By including the amount of the individual goods, your customers will be less likely to challenge the costs and more likely to pay you what you are owed.
- Your total sum payable, all goods listed on the invoice minus any discounts, should be clear and easily identifiable so that the customer pays the correct amount the first time.
- It is your responsibility to set and agree your payment terms with your customers in advance and ensure they are stated in uncomplicated terms to avoid misunderstandings. These terms should then be stated on every invoice for ease of your customer.
- Including a Customer ID, work order or purchase order number will also help your customer identify the payment easily assisting the process of being paid.
- Invoice payment methods should also be agreed with your customer before you issue the invoice, however, stating it on the invoice will avoid them having any issues with paying.
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For additional tips and hints for ensuring your invoices look professional and are easy to pay, as well as other invoice templates, check out the Sage website.
