As a startup company or a new freelancer, invoicing may be a process that you have very little knowledge or experience with. Luckily invoicing isn’t something that is overly difficult to learn. No matter if you’re wondering what an invoice is or what type of information you should include on an invoice, this first timer’s guide contains all of the details you need to become a professional invoice creator.
Keep reading to learn the ins and outs of business invoicing.
What is an Invoice?
In simplest terms, an invoice is a list of goods or services that have been given to a client in a set invoice period. An invoice lists the costs associated with these services and provides a total amount due that a client is expected to pay.
An invoice is a bill, which means that the information within an invoice needs to be 100% accurate. You don’t want to overcharge a client as this could impact trust and confidence in your company. At the same time, undercharging means a loss of money for you.
Before the creation of digital invoicing tools and apps, invoices were created using pen and paper or a word processing program. As technology has advanced over the years, companies have developed a wide range of software, such as an automated invoice maker, that can handle most of the heavy lifting associated with invoicing.
Now that you know what an invoice is used for, you’ll need to know what information needs to be included on an invoice before sending it to a client.
Must-Include Information on an Invoice
The information included on an invoice greatly depends on client needs and the type of products or services you provide. However, there is standard information that all invoices should include.
To start, all invoices should have a header that says “INVOICE” at the top. This way there’s no confusion as to what the document you’re sending is for. The beginning of an invoice should also include your company information, to include name, phone number, and contact information. Client information should also be listed.
To complete the upper portion of the invoice, be sure to include a unique invoice number, issue date, and due date. The invoice number is a unique identifier that can be referenced when discussing the invoice with the client. The issue date and due date create a timeline for when the client is expected to send payment.
Once this information is complete, it’s time to move onto line item descriptions. This part of the invoice is what lists what products or services were completed, quantity, and the subtotal. If you work as a freelancer, you’ll want to include the article title, the rate per word, and the date the article was submitted. This way the client can see line-by-line what work was provided and the associated cost.
Once all line item descriptions for the invoice period have been added, you need to add up all of the subtotals to determine a total payment amount due. This number should stand out amongst other text and totals on the invoice since this is what clients care the most about.
Finally, there’s other pertinent information to include on an invoice such as:
- How a client should pay you
- Client-specific requests
- Fine print items (ie. late payment fee, discounts, etc.)
Once all of this information is in the invoice, you’re ready to send it off to the client! Be sure to keep your own personal copies of invoices and organize them accordingly, either by the client or by month, to ensure that you’re prepared come tax season time.
Ways to Make Invoicing More Efficient
No matter if your invoicing period spans a week, two weeks, or months, it’s never wise to create an invoice from memory. There’s nothing more time consuming than trying to recall all of the work and time you’ve completed during an invoice period. Relying on memory alone opens the door to forgetting about work you did, mistakenly adding in extra hours, discharging, or confusing work you completed for one client with another.
Before you create a single invoice to send to a client, it helps to take notes of what work has been completed, when, and the rates. Depending on the product or service your company offers, you may find it easier to create invoices after each job is done. But, if you work in a digital capacity, you can use folders and online task tracking to ensure each invoice is correct.
Another tip for making the invoice process for efficient is to use an invoice generator. With an invoice generator, you don’t have to worry about totaling line item costs or ensuring that client information is correct. This information can be pre-loaded into a generator program and then selected as you create invoices. These programs also offer other benefits, such as integration with accounting and tax programs.
Understanding the ins and outs of invoicing is a key part of being a successful freelancer or running a successful company. Use this guide to get a solid understanding of everything you need to know when it comes to invoicing. If all else fails, you can also refer to professionals like quickbooks service Greenfield wi