How To Create an Invoice: 10 Essential Things To Include

The number of people who freelance increased from 18.5 million to 28.5 million between 2014 and 2019.

If you’re one of the many people who have ventured into freelancing, then it is vital to know how to create an invoice. Creating an invoice is important because it is how you bill for the services or products you’ve sold.

Whether you create an invoice in Word, create an invoice in Excel, or even create an invoice in Paypal app, there are certain key aspects all versions should include.

Here’s a list of ten essential things to include when you create an invoice:

1. Invoice Number

Every freelance invoice you create should have a unique identifier number. This will help differentiate this invoice from the many others you will make.

If the invoice is requesting payment, then also be sure the person or organization to receive the bill doesn’t need any company details. They might need to have the purchase order number on the invoice.

2. Your Business Information

At the top of the invoice, you should have the name, address, and phone number for your company. This helps to display who is receiving payment (you) and who is paying (the person receiving the invoice). If it helps, think of the top of your invoice as something akin to how you label an envelope with your own name and address and then the recipients.

3. Date

Every invoice should include the date it is being sent. If you want, you can also go a step further and include the dates of the specific transactions you are billing for. This can help you catalog when certain products sold or services were rendered.

If your business has to ship products to customers, this is especially important. For example, let’s say you ship a product to a customer, but then it never arrives. By having all the needed dates, you can better know how to figure out when the post office made a mistake.

4. Line Items

You can think of items on the line as the “body” of the invoice. Line items must be easy to understand. When creating line items, be as specific as possible and include things like:

  • The name of the product or service provided
  • The price of the product or service
  • The amount for the product or service provided

By including line items, you are helping to keep your invoice transparent so that your customers or clients understand what they’re paying for.

5. Description of Line Items

You can go a step further with line items by including descriptions beneath them. This helps detail to the customer or client what they’re paying for.

By including a description with the line item, the recipient will be less likely to query the invoice. When a customer or client must query the invoice, this leads to a delay in you receiving payment.

After you include a description of each line item, also be sure to include the quantity of each product or service and its price.

6. Taxes or Fees

In some instances, such as when you sell physical products, you’ll want to include taxes. Any fees or taxes that you put onto the invoice should be near the actual product or service they’re associated with.

Be sure to look up your area’s tax rates, as they vary from location to location.

7. Total Amount Due

You would think this is the most obvious part to put on every invoice, but it can and does get overlooked. Don’t force your client or customer to do the math themselves to figure out what they owe you. Not only is that unprofessional but it leaves you open to the risk of them making a mistake and not paying you in full.

So, always include the total amount due near the bottom of the invoice. This helps to keep things transparent between you and the customer and prevents any misunderstandings.

8. Due Date

If you want to receive payment in a timely manner, then you need to include the due date on the invoice. People will procrastinate when given the chance and you could be left waiting weeks upon weeks to get your money without a clear due date listed.

Aside from that, the due date can also help you to track your sent and received payments. You should be aware of when a payment is far overdue or not.

9. Payment Terms

You should have already discussed beforehand how the payment is to be received, but it doesn’t hurt to also include this in the invoice.

Feel free to note down how the customer or client should make their payment. If you want them to make a direct payment to a bank account, then you’ll need to include your bank details.

By including payment terms that are clear, you help ensure customers can easily pay you. This can help improve the cash flow for your business since this encourages fast payment.

Beyond this, the terms of payment can also include details about any possible penalties if the payment is late or not paid in full. This might be adding an additional percentage of the bill due every 20 days beyond the due date.

10. Unique Message

If you want to set your invoice apart from others, think about including a personalized message at the bottom. You can use this to say “thank you” to your customer or client. A unique message might also be handy for showing something special about the product or service.

Look at the unique message from this perspective. It’s always nice to get flowers or a thank you note from someone you know. You want your customers or clients to feel important and valued. By including a unique message for them, you are showing them that you appreciate them for doing business with you.

Create an Invoice That Works for You

We hope this article helped to inform you on how to create an invoice. There are many small parts to an invoice, but once you have a template built for yourself, it gets much easier moving forward.

If you found the information in this article informative, be sure to browse our site for other great tips!