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Your Step-By-Step Guide To Creating An Invoice For Your Business

Your Step-By-Step Guide To Creating An Invoice For Your Business

For any small business, sending invoices is a very crucial task. An invoice is the record of the products sold or any service provided and the amount that is to be paid. It is sent by the party providing the service to the client or customer. With an invoice, the recipient is able to understand the detailed break up of what he is paying for, how much amount to pay, and when the payment should be made. By sending an invoice, you can also track the business’s financial prospects, thus easing the tax return process.

Here, we will tell you what information needs to be mentioned in the invoice, how to make an invoice, and the pros and cons of having an invoice template and software. We will also answer some of the FAQs.

How To Make An Invoice: A Step-By-Step Guide

If you are finding it tough to design a professional invoice, then we will help you. Here you can find step-by-step instructions that will enable you to make the best invoices.

If you learn how to design a custom invoice, you can mention your brand while billing the clients. To start making an invoice from the beginning, just follow these steps so that you do not miss any important detail.

Create A Solid Template

When you have to choose an invoice template, keep the industry, and any needs specific to your business in mind. Always give preference to a template that has a clean layout and can be understood easily.
If you send out your invoices immediately after work completion, you can hope to get your payments processed quickly.

If you are able to adjust and provide different methods of payments like accepting debit and credit cards, you can hasten the payment speed. Some businesses impose late fees, while others offer incentives to the clients in the form of early-bird discounts.

Format The Template Correctly

You will have to add a few essentials to all the invoices to make your billing process organized and synchronized. Read on to know the basics of creating an invoice.

Put Down Your Basic Information

It is mandatory for you to add your businesses information like name, contact details like the address, email address, and phone number. You must ensure they are visible on the invoice at the top, preferably in the upper left-hand corner.

Include The Client’s Information

Then add all the client information like the company’s name, phone number, address, and email address. You should head this section as “Bill To.” Write it on the top of the invoice, mostly beneath your business details.

Remember The Invoice Number

Make sure you are writing an invoice number on all the invoices. This will make it easy for you to reference when you follow up with the client. It is helpful even for bookkeeping. You will label the first invoice as No.1, the next as No.2.

Include An Issuing Date

Also, mention the invoice date — this is useful to the clients in remembering when the work was finished. A date also is the starting of the grace period for payments.

List Payment

An essential part of the invoice is mentioning how much the client has to pay. You have to write the total due at the end of the invoice. Above it should be a list that will mention the charges and any taxes in detail.

Specify Your Payment Terms

It is critical that in your invoice, you specify when you want your clients to make the payment. Add the due date for the invoice. Freelancers use a 30-day billing cycle. That means if you have issued the invoice on June 1, the payment has to be made after 30 days which will be July 1.

Also, write down the payment methods you will accept, i.e., check, credit card, PayPal, etc. If you are going to charge late fees, then specify the late fee terms on this invoice.

When you first sign up for a client, you should discuss the payment terms. That way, they won’t be shocked when you send them the invoice.

In the end, just see that all the payment details like bank and card details are correctly mentioned. In case you change the payment options, you can update that later on.

Include An Itemized List Of Services

To have maximum transparency, it is crucial that you mention a list of services you have given during this invoice period. You can present these details like a table with columns like:

  • Services provided
  • Date
  • Quantity or Hours
  • Rate
  • Subtotal

Consider Adding Notes

Though it is not mandatory, you can add a note in the invoice at the end where you can write a thank you message. This provides a good impression of the brand and mostly ensures fast payments.

What’s the Proper Invoice Format?

Mentioned below is the proper invoice format that you must pursue:

  • Mention business information on invoice top in the header format.
  • Below is the business information you have to write the clients billing details.
  • Next to the client’s billing information, mention the invoice number, payment due date, and date of issue.
  • Make sure that you mention the invoice total in the invoice at the top so the clients can see what they have to pay.
  • Do share an itemized list of the services you have given along with a description, quantity, cost, hours, and a subtotal.
  • You can write the total amount that is to be paid at the bottom and mention the applicable taxes.

How To Create An Invoice In Microsoft Word?

With Microsoft Word, you can create professional-looking invoices easily. If you are well acquainted with the software, this remains the best place for any beginning business to make invoices. However, it is not automated and streamlined like a cloud-based invoicing software; for the initial step, you can consider using MS Word.

To create invoices in MS Word, you should:

  • Click on the File menu and then choose from Template.
  • There is a search bar in the top right corner. Type “Invoice” there and search.
  • There will be multiple Invoice templates available. Choose the one that suits you.
  • Modify the header and add your logo and business details.
  • Mention your clients contact détails
  • Write down the invoice number, date of issue, due date, and any other payment terms.
  • List down the services you have completed for the clients along with the charges per item, description, taxes, and subtotal.
  • In bold, mention the total amount that is due.
  • Add a hooter with any notes, like a thank you message.

How To Make A Professional Invoice

To create a professional invoice, you could also purchase cloud-based invoicing software. This invoicing software will give you more variety and better support in developing and tracking invoices. The invoice generator tool keeps your information optimized, and you do not have to make the invoice yourself.

Here are some benefits of using cloud-based invoicing software:

More Customization Options

An Invoicing software offers more customization choices. You could customize the fonts and color schemes, change invoice style, and add logos to the same. By choosing a professional-looking design scheme and font, the software ensures the invoice looks professional and in sync with the brand.

Easier Billing And Faster Payments

Since the client billing information remains stored in the system, you can create invoices quickly. In fact, the invoice numbers are made on their own, so you do not have to remember that. With the Invoicing software in place, the clients pay straight off from the invoice, so payments are relatively fast. If you have to mail the invoice and wait for the payment to come, your payments can be delayed. But if you email the invoice, the clients go through it and make the payment.

Track Your Sales

The Invoicing software saves the past invoices and gives a dashboard that you can use to track the sales. You can see the paid invoices, outstanding invoices, and overdue invoices in this dashboard.

Access From Anywhere

Since this is a cloud-based solution, you can access the invoice from any place. Just log in to the account and create an invoice or record the payments from home, office, or mobile while traveling. Invoice software is an excellent option for those business owners who have to accomplish other jobs as well.

Increased Security

Cloud-based invoicing uses data encryption which is like an added security cover and keeps the business information safe. Cloud-based solutions can store the invoicing data on the computer, thus reducing the chances of data breaches.

Simplified Reporting

Using cloud-based accounting software gives you the ability to generate reports. These reports offer you a better standing of your finances. You may compare the sales over a variety of periods and monitor any unpaid invoice.

Invoice Templates vs. Software

When you have to decide whether you have to choose an invoice template or software, think of your priorities, personal preferences, and frequency of sending the invoice.

A small business that only requires to send a few invoices every month should use a free invoicing template to keep costs low. On the other hand, a bigger company that sends invoices on a regular basis would benefit through the tools and efficiency that an invoicing software comes with.

Templates

It is easy to search for invoice templates online. Some popular places you can find them are:

  • Microsoft Word and Excel templates
  • Google sheets invoice template in the Google docs.
  • Free invoice maker like the Invoice generator

Using an invoice template could be cost-effective and straightforward as you get many options either for free or at a low cost. This could be a perfect answer for those business owners who do not want to use software for their billing.

But, remember Invoicing templates involve more work and do not come with highly advanced features and the ability to automate the process, which you can get with Invoicing software.

Software

The idea behind creating invoicing software is to get your invoices cleared quickly. It comes with features that will simplify your payments. This includes mobile access and “pay now” buttons, along with accepting credit card and bank account payments.

Automated processes can accomplish tasks like generating a receipt when the invoice is paid, creating invoices for regular customers automatically, and sending reminders for payments to reduce your workload.

Invoicing software also gives you insight into the state of your business, like the breakdown of sources of income, the popularity of your product, and the payment patterns of clients.

If you are thinking of choosing invoicing software, you will want to select one of the top relevant features for the business. You should also ensure that the tools provided justify the price charged. Remember that there could be a learning pattern when you start with learning any new software.

Templates For Emails When Delivering An Invoice

When you deliver an invoice, you can write different types of messages that you could write. Here we are sharing a few examples of emails that you can copy and send to the clients.

Template #1

Subject: Invoice [#] for [Project] Due [Date]

Dear [client],

Please find attached Invoice [#} for your review. This covers [insert date range or project] as specified in our scope.

For ease of reference, the payment terms are net [x] days, and the invoice total is [$].
If you have any questions, please don’t hesitate to reach out!

All the best,

[name]

Template #2, Ideal For One-Off Projects

Subject: Invoice [#] for [Project] Due [Date]

Hi [client],

I really enjoyed working with you on this project. Please find attached the invoice for the delivered work, which includes the amount we discussed, payment terms, and complete bank details for payment.

Please let me know if there is someone on your end I should send this to.

In the meantime, if there’s any additional work that arises, I’d be happy to help support your team.

Thanks,

[name]

Whether you are sending an invoice for the first time or you, have sent many invoices before this, maintain a friendly tone, share only mandatory information, and your payment should be processed very soon.

Do you want to organize and automate your billing and invoicing process? Find MCP’s list of the Best Billing and Invoice Software Solutions.

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