What Is an Invoice? (+Handy Tool to Create One)

As a business owner, you must send clients an invoice after you deliver a product or service. Even in our business, we need to invoice our customers.

With the invoice, your client will know what they need to pay for the goods or services you received and how they must pay you.

So, the short answer to “What is an invoice?" It is a layout that includes detailed information about your goods or services, including the price.

But an invoice has more to it, as necessary information must be included. Remember that an invoice is not a bill or receipt but a payment request for services rendered.

How Do Invoices Help Improve Your Business?

Great. Now that you know what an invoice is, let's examine how to create one so you can send your client a professional invoice to receive payment faster.

We have learned that timely invoices can avoid late payments, especially for startups. They also help catch disputes early on about money owed.

Furthermore, it helps give your customers elegant and appealing invoices to make a great impression.

A quality-designed invoice shows that you care about your business.

What Is Included In An Invoice?

There are some essential elements you must include in your invoice as follows:

1. The title “Invoice" must be at the top of your document.
2. You must include your business name, logo, and contact information.
3. The date you issue the invoice must be available with the date your payment is due.
4. You must have an invoice number that your client can use as a reference when paying for your service or goods.
5. The details of your customer, from their name to address, must be visible on the invoice.
6. Your service or goods must be visible, including the rate, quantity, and total amount to pay.
7. Lastly, if applicable, the payment terms and VAT need to be included on your invoice.

Invoice Layout

The fantastic thing is that we use a microapp tool to help simplify the general layout of your invoice. Thus, you can create an elegant and professional invoice to share with your clients.

Using an invoice generator eliminates the hassles that surround invoicing your customers. Still, if you want to create an invoice yourself, you will have the following steps:

1. Create Your Invoice Layout

The first step is to establish a layout for your invoice. You need a header section to add your contact information, dates, and more.

Then, you must add the main body to the details of your service or goods for which you need payment. During your layout design, you can use different fonts and colors to make it look professional.

Also, remember to add your title “INVOICE".

2. Add Your Contact Information

Always include your business contact information to inform your client about the service they used and from what vendor. Include your company name, phone number, address, and other essential information.

Most importantly, include your client's contact information from their business (name), address, and contact details, as this will define who the invoice is intended for.

3. Include Your Invoice Number, Date, And Due Date

One of the most important parts of designing your invoice is adding the invoice number and ensuring it is unique so you can keep track of payments.

Do not repeat your invoice number, as we did in the past. It will confuse you when tax season arrives. So, learn from our mistakes and use INV-001, INV-002, and so on, as they are legal requirements in some jurisdictions.

Furthermore, the invoice date is the day you issue it, and the due date is the last day your client needs to pay, which prevents overdue invoices.

4. Ensure You Have Proper Information With Your Line Items

In the line item section, you must describe the service or products you delivered to your customers. While it does not need to be too detailed, it helps add enough explanations so your clients know what they are paying for.

Next to your product or service, add the cost by displaying the quantity, price per unit, and total cost before VAT deduction.

5. End Total

Once you complete each line, you need to add the total amount and subtotals for each product or service provided on a separate line. Add a line for applicable taxes, discounts, and more; at the end, add your total amount to pay in bold.

6. The Payment Terms and Methods

Whether you have a small business selling goods or a service, it helps to discuss your payment terms beforehand, and you need to add them to your invoice.

Doing this prevents disputes when the payment is due and how they make it. We found it helpful to include the following information:

• The due date of your invoice
• Return policy or a money-back guarantee
• Any penalties for late payments
• Information on how to pay, from checks to the bank, etc.

While adding payment terms is not crucial, it can improve your customer experience and streamline the payment process.

Summary of Important Info To Add To Your Invoice

Great, now that we have covered how you should write your invoice, here is a summary of everything you must include:

1. Your business name, contact details, and address
2. Your customer's name and address
3. The invoice number, invoice issue date, and the payment due date
4. Description of your products or services
5. The quantity and subtotal of each product or service in the itemized list
6. Added lines for discount and taxes ending with the total amount in bold due

Optional Info to Add To Your Invoice

The above information is essential to include in your invoice, but there is also less critical information, as you will see here. We still find that including it helps improve customer service.

It helps to add a description of your payment terms and how they can complete their transaction. Also, add a personal note, as it is a nice gesture when completing your invoice. Here are some things you can add:

• Always greet them by name and thank them for their business.
• Also, tell them you look forward to doing business with them again and mention their experience.
• You can explain your invoice aspects, like getting discounts or presenting them with promotional opportunities.

The important thing is to keep a friendly tone to make your client feel special.

How to Send Your Invoice

Wow, you have created your first invoice and need to send it now. There are several ways to send your client invoice, depending on how you want to send it.

You can email or mail, do it through some banks when requesting payment, or use an online invoice software service.

We found email to be the most common way to send our invoices. However, you can also use invoice software like QuickBooks and others to create your invoice online and send it automatically.

Sending Your Invoice Via Email

If you decide to send your invoice via email, it helps to include some essential elements. Start with a catchy, short subject line.

You can start with your business name and invoice number. Then, greet the person and provide a short and sweet message, as the invoice does all the talking.

Then, attach your invoice to your email to send to your client.

Other Ways of Making an Invoice

There are different ways you can make an invoice using different platforms, including:

1. Microapp Invoice Generator Online

Go to an invoice generator, click on each field to generate your invoice, and download it to your PC. The app is straightforward, and you can add a logo. Each section is editable, so you can add your information as described above.

2. Using Microsoft Word

If you have Microsoft Word, you get an invoice template that works well for small businesses. Here are the steps to create your invoice using Microsoft Word.

1. Open up your Word by starting with a new document
2. Then, create your header by selecting the invoice header
3. Then follow the steps provided above to complete your invoice

It is worth noting that Excel also has an invoice template that you can customize to suit your business.

3. Invoicing Software

Another option is to use online software services, but many of them are expensive. Some programs also have a learning curve and can take time to set up.

We recommend using these services as your business grows and you need a complete accounting system.

But for now, we recommend you check out an invoice-generating tool to make things simpler.

Wrap-Up: What Is An Invoice?

Now that you know what an invoice is, you know it plays an integral part whether you are a small business, large company, e-commerce shop, or a freelancer.

With an engaging invoice with all the necessary information and a great logo, you can ensure your clients pay you on time for your goods or services.

If you are ready to create your first invoice, we recommend using an invoice generator tool to simplify the process.