What You Need to Include in Your Invoice

As a new business, you may be wondering what you need to include on your invoices. This can be tricky, as you want to make sure that you are covering all of the necessary information, but you also don’t want to overwhelm your customers with too much information. 

In this blog post, we will discuss the key items that you need to include in your invoices.

What is an invoice?

An invoice is a document that businesses send to their customers to request payment for goods or services. 

Invoices can be sent electronically or they can be printed out and mailed. If you are sending your invoices electronically, you will want to make sure that they are in a PDF format so that they cannot be altered. 

You will also want to make sure that your invoicing software is compatible with your customer’s accounting software.

What are the types of invoices?

There are few different types of invoices you can send. These include:

• Standard invoice: This is the most common type of invoice used to bill for products or services. It includes all of the necessary information about the transaction, including the date, the amount owed, the item or service being billed for, and any applicable taxes.
• Recurring invoice: This type of invoice is typically used for subscription-based services. It includes all of the same information as a standard invoice, but it also includes information about the frequency of billing and the length of the contract.
• Credit invoice: This type of invoice is used when a customer returns goods or cancels a service. It includes the date of the transaction, the amount owed, and a description of the goods or services being returned.
• Debit invoice: This type of invoice is used when a customer owes you money for an outstanding balance. It includes the date of the transaction, the amount owed, and the reason for the debit.
• Pro forma invoice: This type of invoice is sent before products or services are delivered to a client. Just like most other invoices, it includes a description of the goods/services and the total payable amount. 

There are a few more types out there, and you can read about them here. 

What information should be included on an invoice?

There are a few key pieces of information that should always be included on an invoice. These are:

• The date of the invoice
• A unique invoice number
• Your business name and contact information
• Your customer’s name and contact information
• A description of the goods or services being billed
• The quantity of goods or services being billed
• The unit price of the goods or services being billed
• The total amount owed
• The payment terms (i.e. when the invoice is due)
• Your company’s bank account details (if you are offering direct deposit as a payment option)

Including all of this information will help to ensure that your customers can easily understand and pay their invoices.

Are there any other items that can be included on an invoice?

While the items listed above are the key pieces of information that should be included on every invoice, there are a few other items that you may want to include on your invoices. These are:

• A breakdown of the taxes being charged (if applicable)
• Shipping information (if applicable)
• Discounts or coupons (if applicable)
• A thank you message

Including these additional items is not required, but they can be a nice touch for your customers.

What should you do if you are not sure what to include on your invoice?

If you are unsure about what to include on your invoice, you can always consult with an accountant or bookkeeper. They will be able to help you determine what information needs to be included on your invoices. 

You can also find many templates online that you can use as a starting point for your invoices. If you’re in Australia, this Australian invoice template from Westpac Bank is comprehensive and super-useful. 

How to format your invoice?

Once you have determined what information you need to include on your invoice, you will need to format it in a way that is easy to read and understand. Here are a few tips for formatting your invoice:

• Use a simple font that is easy to read. For example, Arial or Times New Roman.
• Use white space to break up the different sections of your invoice.
• Include a header and footer on your invoice.
• Use color to highlight important information, like the total amount due.

Sometimes, you will also want to make sure that your invoice is correctly formatted for your customer’s accounting software. This can be done by consulting with your accountant or bookkeeper.

What’s the best way to send your invoice?

There are a few different ways that you can send your invoice to your customer. The most common methods are by email or regular mail. You can also hand deliver your invoice if you are doing business with a local customer.

If you are sending your invoice by email, be sure to include a clear subject line so that your customer knows what the email is about. You should also save your invoice as a PDF before attaching it to your email. This will ensure that your customer can open and view the invoice without any issues.

If you are sending your invoice by regular mail, be sure to include a self-addressed envelope so that your customer can easily return their payment. You may also want to consider using a service like PayPal to send your invoices. This way, your customer can simply click a link to pay their invoice online.

What are some common mistakes people make when creating an invoice?

One of the most common mistakes people make when creating an invoice is forgetting to include their business name and contact information. It can be easy to assume that your client will know who the invoice is coming from.

But your client may receive multiple invoices every month, and an unnamed invoice can make it very difficult for them to know who to pay. 

Another common mistake is forgetting to include a description of the goods or services being billed. Once again, it’s easy to assume that your customer will know what they’re being charged for. 

But this is not always the case, especially if you’re sending monthly invoices for a large volume of services/products. So make sure to always specify what you’re charging your customer for.

Finally, not letting your customer know that you’ve sent an invoice can is another common mistake new businesses make. This can be easily remedied by sending a follow-up email after you’ve sent the invoice.

For more useful information related to invoicing, check out our post on How Invoice Factoring Save Companies When They’re Short on Cash.