Invoices act as a request for payment and are sent by a business (or sole trader) to the end customer, prior to a payment being made.
While the format of an invoice can vary slightly, there are parts of an invoice’s structure that should always be included.
To make life easy for you, we’ve put together a basic layout, including the core requirements for a standard invoice.
These are the essential details that you are legally required to have on your invoice:
Additional recommended requirements include:
At the top of your invoice, you should provide your company details. This should include the name of your company, your address and contact information such as your office phone number and email address.
This information provides the customer with the necessary details to contact you if there are any issues or if they need anything clarified.
These details also help to validate and formalise the document. The customer has a contact point allowing them to prove the invoice is from you.
Providing the client's details ensures it’s clear who the invoice is for, removing any confusion and helping to make the document official.
The invoice number should be recorded at the top of the invoice and should be unique to that particular document. If you create changes to the invoice and reissue it, then it will require a new number.
This number is used to track and reference the invoice, allowing you to keep a record of what you’ve delivered. This is useful for tax purposes and helps to reduce errors or duplicates especially when payments are involved.
The issue date indicates when the invoice was generated and serves to establish a timeline for payment, ensures clarity on billing periods, and aids in accounting and record-keeping.
The due date lets the customer know when the payment needs to be made. Some invoices may require payment on the date of issue but many provide a timeframe before the payment needs to be made.
Does what it says on the tin.
The products or services that are being provided should be broken down into quantities by line with a short description of what each item or service is. Descriptions should be short - no more than a sentence long.
These descriptions usually include a price breakdown per line item, however, this isn’t a requirement if you don’t want to separate out your prices.
Make sure this is clearly labelled, there shouldn’t be any confusion between the final figure the customer needs to pay and any other price breakdown.
If you have included the cost without VAT make sure the total price is distinguishable. You don’t want any ambiguity for the paying customer.
Including your bank details or a payment link if it’s a digital invoice makes it straightforward for the customer to pay. The goal is to make payment as easy as possible.
These make the payment expectations clear and can help to protect you legally. Terms might include how you expect to be paid and the consequences of late payments.
Depending on the nature of your product or service, you may or may not wish to include a purchase order number. If an initial purchase order was made before the invoice was sent then including the number helps to track the purchase and payment.
If your business is registered for VAT or you provide taxable services (most businesses do fall into this category), then you should include your business VAT registration number.
In most cases, you will need to include this number. If you are VAT registered, you should make this clear on your invoice.
There are several different types of invoice that can be used. Each has a slightly different purpose and may or may not be necessary depending on what industry you're in.
Also known as a commercial invoice, this is the most common type of invoice and is used in business-to-business (B2B) transactions.
A proforma invoice is issued before the actual goods or services are delivered.
It provides a preliminary estimate of costs and terms, allowing the buyer to review and approve the details before finalising the transaction.
Proforma invoices are often used for international trade or to secure financing.
Also called a progress invoice or partial invoice, this is issued for partial delivery of goods or completion of services. It allows the seller to bill the buyer for work completed or goods delivered up to a certain point in a long-term project.
Recurring invoices are used for services or subscriptions that are billed on a regular, recurring basis, such as monthly or annually. These invoices automate the billing process for ongoing services or subscriptions without the need to generate a new invoice each time.
Also known as a credit note or credit memo, a credit invoice is issued to adjust or correct an existing invoice. It may be used to provide a refund, apply a discount, or rectify billing errors, effectively reducing the amount owed by the buyer.
A commercial invoice is a customs document used in international trade to declare the value of goods being shipped across borders. It includes detailed information about the goods, their value, and the terms of sale to facilitate customs clearance and assess duties and taxes.
In a self-billing arrangement, the buyer generates the invoice on behalf of the seller based on agreed-upon terms and transactions. Self-billing invoices streamline the invoicing process for both parties and are common in industries such as retail and logistics.
When it comes to how much detail you should include on an invoice, there are certain elements that should always be included.
These include the price, invoice number, business and customer address and an item list. However, the level of detail can vary based on personal preference and the type of invoice you’re sending.
The level of detail should generally be proportional to the type of invoice you’re sending. If it is a basic invoice for a low-value product, for example, a recurring subscription, the details can be more basic.
If you’re invoicing a high-value piece of work then adding in more detail will be beneficial to the customer.
Think about what information you would like to be provided on an invoice if you were receiving it. What pieces of information would you like to see and how much detail would you expect?
For the item descriptions and breakdown of prices, there is some variation in how businesses like to present this.
In the skilled trades, some professionals prefer to break down their prices item by item and reflect this on the invoice, others prefer to just provide one price for the total project.
The choice is yours and will often depend on the nature of the work you’re doing, however, you should always separate out the cost with and without tax and discounts.
When presenting the total, you should indicate the subtotal followed by added tax and then discounts with the full total at the bottom, clearly labelled.
If both you and your customer are registered for VAT and you are selling a product or service (a B2B transaction) then it is a legal requirement that you provide an invoice.
If just one or neither of you are VAT registered then an invoice isn’t required, however sending an invoice may still be recommended.
As a general rule, you should send an invoice whenever you sell something and need a clear record of what was sold, how much it cost, and when payment is due. Remember an invoice isn’t a receipt, it’s a record of billing before any money is paid.
Now you know the requirements for writing and sending the invoice, you need to think about how you’re actually going to create the physical document.
In theory, you could write the invoice by hand, but realistically this would be far more time-consuming than necessary.
If you want a physical copy of an invoice you should first create it on a computer using a standardised template and then print it off. This allows you to keep a digital record of the invoice and makes it easier to create copies.
This also allows you to make changes quickly without having to design the whole document again.
When first creating an invoice a good place to start is to use an invoice template. You can find a straightforward template by using Google Sheets.
From the Google menu, open Google Sheets.
Click on “Template gallery”
Scroll down to sales and click on “Invoice”
From there you can edit and create your invoice from the template. When you’re happy you can print the document off or download it as a pdf.
The other option is to use dedicated invoicing software.
With a platform like Payaca, the whole invoicing process is made super simple.
Payaca provides dedicated quoting and invoicing services. Rather than having to build everything from scratch, you can save all your details in the system such as your company address, registered company number and VAT number.
All this information is automatically prepopulated so you don’t have to think about it. You can then focus on building a beautiful quote, with the ability to add item images and other details that help add value.
A system like Payaca also makes the whole payment process far easier, with the ability to send out automatic payment reminders to follow up on the invoice and a slick payment portal that allows the customer to pay directly from the invoice.
If you’re interested you can try out Payaca for free with their no-strings free trial.
Once your invoice is ready, you need to decide how you are going to send it.
If you’ve created the invoice as a physical document then you can either provide the invoice in person or post it to the customer. You could provide this as you deliver the product or service.
If you intend to send a digital copy of the invoice then this can be delivered via email. If possible send the invoice as a pdf document as this is easiest to open and ensures the customer is unable to tamper with the document. Avoid using a Word or Excel file.
Here is an email template you can use to deliver your invoice.
Subject: [Your Company Name] Invoice for [Invoice Number]
Dear [Customer's Name],
Please find attached the invoice for the goods/services provided to you by [Your Company Name]. We appreciate your business and thank you for choosing us for your [briefly describe the goods/services provided].
Invoice Details:
Invoice Number: [Invoice Number]
Date of Invoice: [Date of Invoice]
Due Date: [Payment Due Date]
Total Amount Due: £[Total Amount Due]
Attached to this email, you will find the invoice in PDF format.
The total amount due for this invoice is £[Total Amount Due]. Please review the details carefully and let us know if you have any questions or concerns regarding the invoice.
Payment can be made by [payment method]. Our payment details are provided on the invoice for your convenience.
Thank you for your prompt attention to this matter. We look forward to receiving your payment.
Best regards,
[Your Name]
[Your Position/Title]
[Your Company Name]
[Your Contact Information]
If you decide to create your invoices using Payaca, then communicating with the customer is made easier and more professional.
Once you’ve created the invoice in Payaca, all you need to do is click send. The system will automatically send it to your customer with a pre-saved email template.
You can customise this template with specific variables that will automatically populate the customer's details without you needing to fill them out.
Once the customer receives the email they’ll be able to access their own customer portal. From here they can see not just the invoice but a record of any other files or communications you’ve made with the customer.
Not only does this make the invoicing experience better for you but the customer has a more convenient, more professional experience at their end.
Furthermore, Payaca will automatically send out follow up payment chasers, helping to ensure you always get paid for the work you invoice.
Find out more at Payaca.com.
We offer a free trial of all our features, no credit card required. Setting up takes just 30 seconds.
Try for free
.png)
.png)
