For businesses just getting started with clients and vendors, it can be confusing to fill out an invoice. Maybe, in the beginning, you just sent a PayPal or Venmo request and got paid. But, as your business grows, and you aim to become more serious, you need to send professional invoices. These give your company respectability and stand as legal documents in the event you have any issues with orders or payment.
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So, what do you need to include on your invoices?
1. “Invoice” and Invoice Number
Perhaps the least obvious item to put on any invoice you send is the word “Invoice.” Bills and paperwork tend to get lost by even the most organized bookkeepers and business owners. Without big, bold lettering that announces what this document is, your bill could get confused for a receipt. The word invoice lets your customers know that you are billing them and expect to be paid. There is software that can help with invoicing. They often use templates and will likely include this wording for you.
You also want to ensure you include an invoice number. You can begin with any number, but from there, be sure to assign sequential numbers. For each client, you can assign a number in the thousands, for example, and then move forward from there. So, your first client’s first invoice would be 1001, and your seventh client’s fifth invoice would be 7005. This numbering system allows you and your client to remain on the same page with ordering and billing.
2. Your Business Name and Address
After your invoice number, be sure your business name, address, and any other pertinent business information are clearly marked. It’s also important to use a business name your client recognizes. You don’t want to operate under one legal business name and then send an invoice from another entity. It will confuse your client and may delay payment until you can clear up the miscommunication.
Your address, email address, or PayPal information is just as important as your business name. This information tells your client how to pay you. In many cases, you and your clients will establish a form of payment that remains the same throughout your working relationship. But, just in case, always include the information on all your invoices. That way, you can be sure your clients are always clear on how to get you paid.
3. The Client’s Business Name and Address
In addition to your name and address, you also want to include your client’s name and address. This step can be challenging at the beginning of building your business as you might not naturally collect this information. After all, if you provide a product or service that doesn’t include the client’s home or place of business, why would you have their address? Still, without this information, you stand to lose money if the client decides not to pay.
The client’s name, or business name, and address on the invoice represent proof that you’re billing this specific client. Especially if the name is common, who’s to say it’s not another Bill Johnson? For this reason, make sure to get the client’s full name or business name and address before providing services or products. Then, when you include it on the invoice, you have established a level of trust and legal recourse at the same time.
4. An Itemized List of Products or Services
Now, the most obvious part of the invoice is usually the itemized list of products or services. Be careful not to simply fill in “services rendered” or some other vague expression. Paying close attention to this section on the invoice will help you track inventory and help your client remember what they’re paying you for. It also, again, serves as a legal document supporting your claim that you are owed money. Without an itemized list, the client could technically dispute the services or the pricing.
For each item on the invoice, include the date you provided the service or product. Sometimes, you’ll invoice a client once every two weeks or every month, so track every item. Then, state clearly what product or service you provided on that date. For example, you could write 9/12/2024, “a consultation call to discuss the outline of the book.” The more detail you provide, the better as it will jog your client’s memory and provide proof of the service.
5. Invoice Date and Due Date
Finally, it’s important you note both the invoice date and the due date on your invoice. These are separate from the dates on the itemized list on your invoice, which indicate when services were rendered. The invoice date is the date you actually send the invoice. So, be sure to send the invoice on the day you fill it out rather than delaying it for a day or two. This delay can lead to confusion with your client when it comes to the due date.
Next, make sure to mark clearly either the exact due date or the number of days from the invoice date. Some people like to write “net 15” or “net 30” on their invoices. These terms let clients know how many calendar days they have from the invoice to pay. It can be useful to use different terms for different clients, depending on your level of trust. A client that’s always late, for example, should get “net 15.” A client that always pays on time might even get “net 60.”
In the end, filling out invoices can be one of the more fun parts of running a business. It’s exciting to review what services or products you’ve provided and to see your client list build. You’ll likely also enjoy adding up the amount of revenue you have coming into your business. Just be careful to include all the items listed here on every invoice you send out. Your clients and your business will thank you.
