What to Include in an Invoice

If you’re self-employed or run your own business, being paid on-time and for the correct amount is absolutely essential. One of the ways you can help make the process as speedy as possible is by sending accurate, well-formatted and detailed invoices to alert the customer what they’re paying for and exactly how much.

Whether you’re just starting out or are wondering what to include in an invoice to make it quick and easy for your customers to pay you, we’ve got you covered with our top tips on invoicing.

What is an invoice?

An invoice is a bill that you send to a customer or client to request payment for goods or services. Invoices are absolutely essential as not only do they help you keep track of your cash flow, but they’re also needed when it comes to tax returns. It differs from a receipt which is only for the acknowledgment of payment.

It’s worth noting that if you’re selling to another business and you’re both registered for VAT, sending invoices is a legal requirement and you must send a VAT invoice too.

What should an invoice include?

GOV has clear details on what an invoice should include to ensure accurate bookkeeping:

  • A unique identification number
  • Your company’s information: name, address and contact details
  • Customer’s name and address
  • Clear and concise details of the service/goods you’re charging for
  • Date the goods/service was provided
  • Invoice creation date
  • Amount being charged
  • VAT amount (if applicable)
  • Total amount

Sole traders must also include:

  • Name and business name
  • Address for legal documents to be sent

Limited companies must also include:

  • Full company name as it appears on the certification of incorporation
  • Registered office address
  • Registered company number
  • You don’t have to include director’s names but if you do, you must include them all

How do I send an invoice?

The most common way of sending an invoice is via email as it’s quick and easy. After you’ve created your invoice, make sure you send it as a document that’s easily opened such as a PDF – PDFs are also a good idea as they’re non-editable which can help to prevent fraud. Stay away from word or excel files as these can be reformatted on different devices which can make them hard to read or understand, thus holding up your payment. Remember to include a clear, concise subject line and a short, explanatory email detailing what the attachment is.

How long should I give a customer to pay?

Unless a payment date is specified, by law the customer must pay you within 30 days of receipt of either the invoice or goods/service. If they exceed this, you can use a statutory demand to formally request payment. On top of this, you can also choose to charge interest for any late payments to deter late payments from customers in the future.

4 top invoicing tips

Now you know exactly what to include in an invoice, here’s some top tips to ensure you’re sending invoices which look and sound professional and can help to ensure you’re being paid accurately and on-time, each and every time.   

1.     Make sure it’s well-designed and error free

Our first top tip is to make sure your invoice is clearly formatted and proofread. Not only will this make a great first impression on your customers, but it will also make sure they can quickly and easily understand the information and help to avoid late payments as a result of confusion or typos.

2.     Include your branding

Make your invoice look as professional as possible by including your branding such as your logo, colours and font.

3.     Clearly state that it’s an invoice

This tip may sound a bit obvious, but you’ll be surprised by how many invoices get muddled up or set aside as they’ve been confused for a quote or an estimate instead. Always include “INVOICE” in large, clear lettering at the top.

4.     Add payment terms

Always add payment terms to your invoices as this will tell the customer how long they can take to pay. This can help to prevent payment delays as a result of confused customers thinking they can take all the time in the world to pay. Don’t forget to include details of how to pay the invoice too such as bank account details.

Now you know what to include in an invoice and how to send one! Remember to always keep records of all your invoices as these are essential for your tax return.

Want more easy-to-understand tax and accounting advice, without the jargon? Read our complete guide to becoming self-employed, next.