How To Create An Invoice



Whatever type of business it is that you operate, it’s extremely likely that at some point, you’re going to need to raise an invoice.

If you’re part of a large organization, chances are you’ll have your own finance department to deal with the actual creation of the invoice and all you’ll have to do is pass over the details.

And if you’ve been running your small business for several years or have experience of working in a corporate environment where invoices are used, you’ll generally be able to create an invoice yourself from scratch.

But what about if you’re a small business owner who has only just setup their company and has no previous experience in raising invoices?

Fortunately, there’s no need to worry – an invoice can be created on a simple A4 piece of paper, divided up into 3 sections.

Header:  who is the invoice from?

The very first piece of information that the person receiving the invoice should see is the sending company’s name and full address, so that they know who the invoice is coming from, as well as a contact name and their telephone number.

In addition, the header should also include the date the invoice was raised and the invoice number (you don’t need to have any major numbering or identification system in place – a simply ‘001’, ‘002’, ‘003’ and so on will suffice).

It’s also good practice to put the details of the company who is being invoiced here, although they can go into the body of the invoice or in an additional section in between both.

Body: what does the invoice relate to?

This is the part of the invoice that details what it is relating to and how much the invoice is for, therefore it’s imperative that you ensure that all of the information in here is correct and accurate.

The easiest way to set this part of the invoice up is to split it into four sections – description, NET amount, tax and total amount.

The first section, description, should detail everything that the invoice is requesting money for.  Whether it’s for an item or a service, give as much relevant information as possible – too much can be seen as unnecessary, but too little is simply careless and can, in some instances, be extremely problematic.

The second section should detail how much the invoice is for without tax; the third should state how much the tax is (if applicable) and the final section, total amount, is just that – the total amount of the invoice, which is the tax added to the NET amount.

Footer:  how can the invoice be paid?

As the reader of the invoice should by now understand who they invoice is from, what it relates to and how much it is for, it’s time for them to find out how they can pay it and what additional information they have to note.

The general rule is that the more payment options you provide, the quicker you’ll receive your money.  However, don’t feel obliged to explain that you accept check, bank transfer, PayPal and cash as payment if you would prefer to simply accept a check – just be aware that some businesses may find it easier to pay by a method you haven’t listed.

It’s important here that you either provide full details of how payment can be made (for example, who to address a check to or the e-mail address of your PayPal account) or provide details of just one option and explain that details of all other payment methods are available upon request.

Furthermore, it’s always advised that you include a sentence that states when you expect payment to be received by.  How long you give depends on you as an individual, but explaining that you should receive payment within 14 or 28 days is usually considered to be the norm.

Finally, include all of your contact details at the bottom of the invoice.  Although your address and contact number are at the top of the invoice, include your e-mail address, fax number and website – as with the payment methods, the more options you give the company to contact you, the quicker they’re likely to get in touch.

How you layout the invoice is entirely up to you, but it’s worthwhile keeping in mind that there’s no need to make it elaborate or extremely aesthetic pleasing.  As long as it includes the details mentioned here in a clear and concise manner, attractive aesthetics are purely secondary.

This post was originally featured on August 31, 2010.

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