How to make a professional invoice: Expert tips and a step-by-step guide
Now that you have sold a product or rendered a service through your online shop, it is time to get paid. This is great news! This is great news!
What is an invoice? How do you make one? And what information should you include? This step-by-step guide will help you create an invoice.
What’s an invoice?
An invoice (also known as a sales invoice) is a document that bills a customer for your services or products. An invoice is an account receivable, which obligates the buyer to pay. It is a written agreement between you, the seller, and your client or customer (the buyer).
Invoices can also be a great way for your business to track its earnings. Written invoices are a great way to keep your finances organized. They also simplify accounting for tax season.
What is the difference between a bill or an invoice?
Technically, nothing. Bill and invoice are both terms used to inform customers or clients how much they owe on a product or service. The main difference is in who refers to the document.
Let’s first define each word:
An invoice will be issued by your business to the purchaser detailing the sale of products and services, as well as the amount owed. An invoice is used to:
- Document a business transaction that involves payment from a customer
- You must request payment from the customer within a specified time frame
- Maintains a list of products and services sold to assist with bookkeeping
A document is sent to your customer by you that details the amount of money due in exchange for goods or services. A bill
- Let a customer know how much they must pay.
- Provide a detailed record of your customer’s expenses for use in bookkeeping
The document is often referred to by the business as an “invoice”, while buyers get “a bill” which details the amount they owe. This is how it works:
Step 1 – Your company sends an invoicing to your customer
Step 2 The bill is delivered to the customer
Step 3 The customer repays the amount owing
Step 4 – Your business will issue an invoice receipt to prove that payment has been made.
What are some of the most important legal requirements for invoicing?
If you want to create a professional invoice, there are many details that you should include. These are the essential details that your invoice should contain:
- Your company name: This is your official business name and tax ID number. To make your business look more professional, include your logo.
- Name of your customer: Identify your customers, including their name or business name and tax ID number.
- Contact details Enter your address, phone number and customer contact information. This information is particularly useful in the event that either party needs to contact you.
- Invoice number An invoicing number is a way to keep track of your invoices so they don’t get mixed up. Pro tip Track your invoices easily with an abbreviated version your customer’s name followed by a dash and the month/year. For example: Invoice WIX-0520)
- A list of costs and services: Invoices generally include the items purchased, whether they are products or services. Prices and quantities can also be included. To avoid confusion, enter as much detail as you can. If you offer a service by the hour, describe the time it took to complete the task. If applicable, include a separate line to account for wire transfer fees or VAT.
- Dates Your invoice should include all relevant dates such as the date the invoice was issued, when the sale or service occurred, and the time that the invoice covers (for periodic bills).
- Total amount Draw a line showing all the amounts your customer owes to you. All products and services should be included in the total amount. Before you calculate your total, don’t forget about any additional fees.
- Payment information Provide your bank information to help your customers pay you. Third-party payment processors like PayPal and Transferwise are also used by many customers. They only need an email address and not sensitive information such as your bank details.
- Terms & Conditions: On every invoice, write the terms and conditions that you and your customer have agreed to. These could include your rates, return/refund policy, product warranties, shipping information, and privacy policies.
- Due Date: Avoid confusion later by clearly stating when you expect payment. Write “May 31, 2021” and not “Due within 30 days.”
Tip: Set a time frame for all invoices so that you know when to expect your payment. Your customer should pay you within 30 business days of the invoice’s date. However, it is possible to make this shorter or longer depending upon the nature of your business and how much you owe.
5 tips to keep an invoice looking professional
An invoice is another aspect of your business. Invoices are a professional way of building brand trust and letting customers know that they must pay on time. These are 5 tips to keep in mind.
01. Include branding
To keep your branding consistent, add your logo to your invoice. You don’t yet have one? Use a Logo Maker to create a logo for your company.
02. Use an invoice template to create or modify
You can either create your own template, or you can use one already created. Keep your invoices consistent in appearance and structure so that your clients or customers can recognize them easily and find the information they need. An invoice generator can also achieve the same result.
03. Make sure to check spellings and find any mistakes
Although it may seem obvious, you’d be amazed at how many businesses fail to do this. Customers can see through your business if you have to correct or resend invoices. Before you send your invoices, double- and triple-check them for errors.
04. Multiple payment options available
It can be helpful to offer customers a range of secure payment options such as digital wallet, credit card, or wire transfer if you want to ensure that they pay promptly and on time.
05. Thank you
It is a good idea to say “Thanks for your business” at the end of your invoice. You can be genuine and let your customers know what you mean to them. This can increase the probability of payment by 5%.
How can I create an invoice?
It’s now easier than ever to create an invoicing. You can actually create a professional invoice within minutes with a HTML3_ free invoice generator HTML3_. These are the steps to follow:
Step 1 – Add your information
Include key details that will benefit both you and your customer/client.
- Name of the business
- Website for businesses
- Contact information, such as email or phone number
- Mailing address
Step 2 – Describe the services or products you are charging
Invoice settings will include the invoice number, issue date and due date. Include a description and a line for each product. Then add:
- Hourly rate or price
- Quantity (or the number of hours worked)
- Discount (if applicable).
- Additional terms or notes
Step 3 – Finalize and Send!
Wix’s Invoice Generator will calculate your total automatically. Make sure you have all of the necessary information before you send. You can either email it directly to your client, or download it.
Step 4 – Issue an invoice receipt
After your customer has paid, you can send an invoice receipt to follow up. This will help you keep track all payments received.
Invoice from Scratch
These steps will help you create an invoice directly from scratch if you don’t have a generator.
Step 1 – Open a blank sheet
Step 2 – Create a branded invoice head
Invoices should include a header with the brand details and billing information.
- Your logo
- Contact information for businesses
- Invoice date
- Invoice number
Step 3 – Add the information of your client
Include the contact information of your client, such as company name, address, phone number, and name of relevant contact. You can use this example:
The Bill To:
Name of the Company
State 55555, City
Step 4 – Add the due date
At the top of your invoice, write the date, month, and year due.
Step 5 – Add an itemized sales list
You can then create a table by adding columns that detail the services and/or goods provided, date of order and the cost per unit. Be sure to indicate the currency. Example:
Step 6 – Calculate the total
To calculate the total amount due on the invoice, add a last column. Excel’s SUM function and many other spreadsheets can do the math. Remember to include any applicable discounts, fees, or tax rates in your total.
Step 7: Add payment details
Include relevant payment information such as your PayPal ID. Include your name, account number and SWIFT code, bank and address, as well as the bank wire transfer information. Add a personal note at the bottom such as “Thanks for doing business with me!”