What to include on an invoice

‘Cash is king’ and being able to send a correctly laid out invoice is a vital step in ensuring that your business gets paid.

What is a sales invoice?

Simply put, it is a document that records a sales transaction.  It is not a receipt but includes information on the sale, the date, items sold or services provided, the total cost and payment terms and details.

The whole point of a sales invoice is to provide a record of the sales transaction so that you and the buyer can use it to track the business transaction.  Therefore, it is essential to create a professional, well laid out invoice that includes the correct details including a logo, company branding and company colours.  Handwritten invoices, especially in this day of age does not look professional – regardless of whether you are a sole trader or not.

Things an invoice should include are…

Business Name and Address

Previously, having this information would have been important for customers to post a cheque out to you.  Now it is essential so that buyers can identify who the sender of the invoice is.  Remember that the person you have been dealing with may not be the person who is handling the invoice payment.  It also means that should the buyer need to contact you by post, they have your details.

You should also ensure that an invoice has any other relevant contact details including phone number, email address and website address.

If you are a limited company, you should include the registered address as well as the company registration number.

The customers business name and address

Ensuring that the invoice has the right name, company name and contact details ensures that it goes to the right person and there is no hold up in receiving payment for your work or goods.

Invoice Date

In the UK, different companies have different payment terms but you need to include the date that the invoice was issues.  This is the date for all payment terms to work around.

Invoice Number

If you are sending a customer an invoice at the end of every month for the whole year then they will have 12 invoices from you. If each invoice is for the same type of service at the same value then it can, for them, be very hard to distinguish between one invoice and the other.  Which is why it is vitally important that you include a unique invoice number for each invoice that you send out.

Purchase Order Number/Reference

If your customer has provided you with a purchase order number then make sure you include it in the invoice.  It makes their job a lot easier for paying you.

The description/details for goods and/or services delivered

It is helpful to breakdown an invoice into the various items sold or services provided.  It means that you and the buyer are both clear on what was purchased.  This can include a description of the goods or services sols, quantity of each item, unit price (if required) and a discount if there is any.

Supply Date

If the invoice is for goods delivered, include the date that they were delivered.  This can be very useful for future referencing, especially if the buyer contests something in the invoice.

Payment Terms

You should always be clear with your payment terms when you sent a customer an invoice.  Charge interest on late payments and ensure that you get the full payment when the invoice is issued so that you are not spending time chasing up payments over several months.

There are different payment terms including:

• Immediate payment
• 7 Day Payment
• 14 Day Payment
• 30 Day Payment
• Net Monthly – payment is due at the end of the following month of invoice.

Payment Due Date

While it is important to include the date the invoice was issued, it is also important to state when the invoice needs to be paid by.  Do not rely on the customer to do the maths.  Make it as obvious as possible when the money has to bee with you.

Payment Methods

Most companies include different ways that payment can be made.

• Cash
• Cheque
• Credit card
• PayPal
• Bank transfer
• Direct Debit
• Standing Order
• Integration in accounting software

With all methods of payment, ensure that you include how they can send you the money.  If it is a bank transfer, include your banking details.  If it is Paypal, include y our Paypal account ID details.

VAT

If you are VAT registered, you will need to issue a VAT invoice clearly showing sales tax rate, VAT amount and registration number. The VAT invoice is used to calculate how much VAT needs to be paid to HMRC.

About Momentum Bookkeeping

Our goal is to make running your business easier. Whether it’s getting paid by your customers on time, completing your VAT returns or processing payroll; the demands on businesses can seem endless.

Let us handle your bookkeeping needs so that you can focus on running your business and gain some real momentum.

Covering the full range of bookkeeping services that the typical business would require, we have built our bookkeeping services around going a step further. And that means that we offer not just what you expect, but what you need (even if you didn’t know you need it).

From VAT returns and payroll services to custom built MySQL databases as part of our Bespoke Services. From a once a year service to a daily interaction service into your business; we can be as integrated with your business as you want us to be.

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