It may be the starting point in your line of business or perhaps you are negotiating a deal with a bulk buyer and they request an invoice (or quote). Believe it or not there is a formula to invoicing and today we are going to discuss what entails a good invoice. This is not only a matter of format but we also look at issues of legal validity and tax compliance all in one.
What a good invoice includes
Your name and contact details are required. If you are VAT registered this should include Vat number too.
Identify the person or organisation that you’re billing, and include their physical or email address, contact person there and their phone number.
Invoice number and date
Make this big and bold. If you call about an invoice and quote the number, it should be easy for your customer to pick it from a pile. Invoice numbers are very important, you can use any series but it must be sequential and identifiable as such, INV001, INV002, INV003 qualifies and does something date based for example a YYYMMDD# (EG 202001231).
Description of goods or services
List the products or services supplied. Put costs against each item so customers can see how the bill breaks down.
What the customer owes
It should be clear and obvious what is due including what portion of that is VAT if applicable.
In large organisations, they use purchase order numbers to track purchases. If you have been given a purchase order number include it on the invoice.
How to pay
Well, what’s the point of invoicing if you’re not asking for payment right? Give clear instructions on where, when and how payment is expected on the invoice.
Additional terms and conditions
While terms and conditions are usually left for the purchase agreement some terms may be put into the invoice or quote. Say for example the quote is only valid for a week or two weeks because of inflation, it’s a good idea to have this information in the invoice.
While there are apps for invoicing they have their kinks and quirks. To create brilliant invoices all you need is a spreadsheet application. Matters of style vary from business to business but here are some visual representations of good invoices.