How to Make an Invoice in 5 Steps? 

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Billing clients is a tedious yet necessary part of the job. It is critical for freelancers, contractors, and business owners to get paid on time for all their work. Tracking what’s settled, overdue, and outstanding with good invoice knowledge and a solid billing process is essential for generating revenues.

The Credit Research Foundation concluded in a recent report that 61% of late payments occur due to various administrative problems, such as incorrect invoices. 

The quality of your invoice is essential for your business to remain successful and to exist as a successful enterprise. 

By displaying your professionalism using invoice template options, you are building brand equity that helps you retain more customers, allowing you to maintain your reputation. 

Making an invoice isn’t that difficult. This guide explains how to make an invoice.

What is an Invoice?

Most invoices were printed on paper and physically delivered to clients not long ago. Although, with the development of digital technology, businesses can now create, store, and monitor invoices online from their mobile devices and on the go. 

Business owners and freelancers who work from home have an easier time creating an invoice, tracking multiple invoices simultaneously, and keeping a tighter grip on their books. This is to ensure that both parties meet their payment obligations on time.

When a buyer and a seller make a transaction, an invoice is used to record the details of the transaction. 

Like a receipt, this document is itemized to make it easier to show the full details of the transaction, including the products purchased. 

Create Invoice at Ease

Making an invoice hardly takes seconds. Try now and experience it.

5 Steps to Create Invoice

Paperwork is a big part of running a small business. It is luckily possible to streamline and improve this process with the help of solutions. Creating and sending a professional invoice doesn’t have to be complex. InvoiceOwl, a free invoice generator, allows you to create professional invoices quickly and efficiently.

This section will cover how to make an invoice and simplify your invoicing process.

1. Get started with an invoice template

Whenever you create an invoice, it is best to begin with a professionally designed invoice template for a good start.

An invoice template is designed with a pre-made header, a section header, a section layout, and even placeholder text that can be filled in. Simply replace the existing text with the information you desire.

Invoice templates can benefit you in terms of saving you time and effort. There is no need to think about how you want the invoice layout to look or where each section should be placed in the document, and you can use that time to invest in more important things, such as growing your business.

Invoice templates with placeholder content make adding invoice details like invoice IDs and addresses to your invoices easier.

2. Fill out the company and customer information

Next, you will need to complete basic information on the company and the customer. You should consider including your name, address, phone number, and email address with this form.

This is among the most vital step when you create an invoice. Adding the customer’s and business’s details will make it easier for the customer to identify and file the invoice. Also, make sure to add a field to add purchase order numbers.

Invoicing software can be helpful as it allows you to upload customer information to the system to save time. Each invoice is automatically updated with the customer’s details once stored, saving you the trouble of manually typing each customer’s details at each invoice.

3. Describe the goods and services

The next crucial thing when you create professional invoices is to add a detailed list of all items you provide to the customer, including their exact quantities. When it comes to services offered, the amount can be replaced with the number of hours needed to complete the service.

You must use the right business information for this section. An incorrect service or good will leave a negative impression. If that happens, the customer will likely request a reissue of the invoice with the corrected information, causing you to lose valuable administrative time.

4. Calculate the invoice total and payment due date

Specify on the invoice the due date you need the payment, and write down the total amount of money owed by the client. Hourly charges can be calculated based on the services provided.

In this way, the customer can see what they owe at a glance and by when they must make payment.

During this stage, you should also pay extra attention. It can harm your cash flow and profits if you issue an invoice that lists the incorrect amount to be paid. 

5. Mention payment terms

Invoices should also include payment terms that have been agreed upon by the customer before the invoice is sent, but it is also a good idea to note these terms on the invoice.

The way to ensure that you get paid within a given number of days is to include, on the invoice, a reminder that it is due in the next few days.

The most important thing to note is that your customer must know exactly how to make the payment. Ideally, your customer will want to withdraw funds directly from a bank account and add your bank details, if that’s the case.

In addition to offering clear payment instructions, you should provide easy ways for customers to pay, encouraging quick payment.

Why Do You Need to Send an Invoice?

The invoice serves as a record of your business. You need an invoice to keep track of which customers owe you money. In addition, you will be aware of overdue payments.

As well as being a record for the person who receives them, an invoice is also a document for the person who sends it (although there is a noticeable difference between the two). The invoice notifies the customer when and how much they owe.

Accounting using accrual methods requires you to record the invoice amount as receivable when payment for the good or service is due from the customer. Maintaining accurate accounting records requires invoices.

For what purpose do invoices serve? An invoice is what leads a customer to pay you. Invoices are vital to cash flow; without them, your cash flow will be slow. With an invoice, you can remind customers that they owe you money.

A financial audit by the IRS requires you to keep records, including invoices. If you want your invoices to be tracked accurately, you need to keep copies of your invoices (either digital or paper copies) in a safe place.

Send Invoice to Receive Payments

This software send invoices and receives payments on your behalf.

How to Fill Out Invoice Template

Invoice templates are professional-looking invoice designs for small businesses and freelancers. These templates make it easy for you to send professional invoices to your clients to be paid for your goods or services. You can also send the invoice as a PDF to your clients after downloading it. 

When utilizing the professional invoice template, you won’t have to make much effort as everything from invoice number to contact details is already specified. You need to do some editing as per your requirement. 

Let’s have a quick glimpse of how to fill microsoft word invoice templates or any invoice templates.

Add invoice title and business logo

A clear “Invoice” title should appear on your invoice in case it needs to be used for legal purposes. As a result, your invoices will remain separate from your other documents and will be much easier to manage.

If you would like, you can also include a logo in your email, but it is not required. Create a borderless table and place your logo on the right of the invoice header, or you can place it under the title “Invoice.”

Your business name and contact information

Make sure you include your full business name on your invoice – or your name if you are a contractor. Add your contact details, including your name, address, e-mail address, and telephone number. It is essential to include these details in your and your client’s accounting and legal documents.

Buyer’s name and contact information

Here is where you can enter the client’s name and contact information. Whenever possible, include as much information about your client as possible, and don’t hesitate to ask if you need more information. If you are billing a specific person at a company, you may list the company name and the person’s names afterward.

Invoice number

For easier tracking, you should assign each invoice a unique invoice number. Having a simple billing system doesn’t require anything profound.

For example, use the invoice date and the sequence in which the invoices were sent. A first invoice sent on 9/6/2022 will have the number “09062201,” and a second invoice will have the number “09062202.” Choose a numbering scheme that works for you.

Invoice date

Indicate the date on which you sent the invoice. This is especially important when you prepare invoices in advance.

Be sure to use a date format that makes sense for you and your client if you’re billing a client in a country other than the United States. If you wish to write out the month in the date, you may do so in MM/DD/YYYY format per the American standard. Instead of entering “11/8/2022,” you can type “November 8, 2022.”

Payment due date

This is where you list the due date for your client’s payment. Some common payment terms vary by industry:

Net 30/60/90: The term “net” follows a number which denotes the days until the buyer’s payment is due, regardless of whether it is a business day or a holiday. For example, an invoice sent on February 28 would be due on March 30.

End of month (EOM): Some businesses combine net payment terms with electronic payment terms, which means payment must be made 10 business days after the end of the month. A net 30 EOM invoice sent on March 15 would require payment by April 30.

On receipt: When the buyer receives the invoice, they should pay it immediately.

Terms and conditions

Please note here any other terms and conditions that may apply. There are several examples, such as:

  • Terms of payment, such as net 30/60/90, electronic funds transfer, and advance payment
  • Terms of sale, including who pays taxes and duties
  • Terms and conditions of the warranty
  • Policy regarding returns
  • Fees for late payments
  • Early payment discounts
  • Payment methods accepted
Frequently Asked Questions
  1. Where can I create my invoice?

    InvoiceOwl is your one-stop solution to create an invoice for your business. It is the leading invoicing and estimating software that lets you create invoices on free invoice templates that look professional and help you get paid faster. Start with a 14-day free trial, and you will be amazed to see its features, invoice templates, and more in-store.


  2. How to create your own invoice?

    Do you need help creating an invoice? Here are the steps you need to follow:

    • Use an invoice template. 
    • Add your client and company details. 
    • Describe the products and services rendered to the customer. 
    • Add money owed. 
    • State the payment terms and conditions clearly.

  3. Is it possible to handwrite an invoice?

    Yes, invoices can be handwritten, but it’s not always wise to use this method. In today’s digital world, the handwritten invoice doesn’t work, and using this invoicing method might also harm your brand image.

Conclusion

There you are. Taking these steps will ensure you get paid faster without annoying your customers. You will procure your dues by choosing a free invoice template, adding client details, assigning invoice numbers, including services, and choosing terms.

Author Bio
Jeel Patel
Jeel Patel
Founder

Jeel Patel is the Founder of InvoiceOwl and is the main curator & writer of the content found on this site. With ideals of quality, commitment, and perseverance, he believes in creating lasting business relationships with the clients.

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