How to Make an Invoice in 5 Steps? 

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If you are wondering how to create an invoice easily, then you are at the right place. With this guide, you will be able to create an invoice with just 5 simple steps.

Invoicing is a crucial aspect of running a successful business, as it helps to ensure timely payment and maintain healthy financial records. 

Creating an invoice may seem simple, but several key elements must be included to make it professional and effective such as:

  • Your company’s information
  • Goods/services provided and their cost
  • Taxes involved
  • Total amount to be paid
  • Payment terms, etc.

Thus, in this comprehensive guide, we will show you how to make an invoice that is accurate (Incorrect invoices cause 61% of all late payments, says data), transparent, and professional.

So whether you’re a small business owner, freelance worker, or just starting out, this guide has everything you need to know about creating invoices that work for you and your clients.

What is an Invoice?

When a buyer buys something from a seller – goods or services – it also receives the detail of the payment that needs to be made. That’s an invoice. You can even call it a bill in loose terms. 

    For example: After dining at a restaurant, the waiter brings you a bill or invoice stating the dishes you have eaten and their prices. Its total is what you need to pay.

Forms of invoice

Invoices can take 2 forms – paper and digital. Before the internet took over the world, the paper invoice was the only option which has many limitations such as:

  • Needed to be delivered physically
  • Costly to create and deliver
  • Takes more time to process
  • Hard to manage

However, with the development of technology, you can create digital invoices with invoice templates or invoicing software like InvoiceOwl. Digital invoices solve all the above-mentioned problems.

Thus, small business owners, freelancers, and contractors have been greatly relieved as they work on a tight budget and require quick payments from clients to sustain.

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5 Steps to Create Invoice

Invoicing is a big part of running a small business which can take up a lot of your time. Fortunately, you can streamline and quicken the process to create invoices. Here are the steps you need to follow. 

1. Get started with an invoice template

An invoice template is a pre-designed replica of an invoice that you can reuse and edit again and again as per your needs. 

Invoice template

So all it asks you is to fill in the invoice details. This saves your effort from having to design and structure it every time you create an invoice.

In other words, use an invoice template and you are already halfway through the process of creating an invoice. It eases your life by:

  • Saving your time
  • Improving your accuracy
  • Bringing consistency to your brand and thus, increasing its recognition.
  • Helping your business come up as more professional and trustworthy.
  • Bringing order to your invoicing process.

Now, the question that remains is: Where to find invoice templates? But no worries as we have taken care of that.

    Recommended: Try these free invoice templates and choose from various formats such as Microsoft Word and Microsoft Excel

2. Fill out the company and customer information

billing template

Downloaded your free template? Next, you will need to fill in the following information about your company and the customer: 

  • Business logo
  • Business name and address
  • Client name and address
  • Phone number
  • Invoice details such as invoice number and invoice date

Adding the customer’s and business’s details will make it easier for both of you to identify and file the invoice. 

By the way, to speed this up, you can consider using invoicing software. It lets you save and reuse client details so you don’t have to manually write them again while creating any invoices in the future.

3. Add the details of the goods or services you provided

billing template

This is the part where you add the details that give an invoice its identity – the billing information. Here is what it consists of depending on the type of your offering:

Goods Services
1. The products you provided 1. The services you provided
2. The units of each product 2. The cost of each of those services as per your pricing model (per hour, fixed, etc.)
3. The price of the product per unit 3. The total cost of each service
4. The total of each product purchased

When you create professional invoices, you must ensure that these details are correct. Otherwise, when the customer points out any mistake in the invoice, it has 3 repercussions:

  • It leaves a negative impression.
  • You will have to spend time confirming those incorrections and creating a new invoice.
  • It will delay your payment.

4. Calculate the invoice total

Calculate the invoice total

Next up is to calculate the total of all the goods or services that you offered (+ taxes). This is the total amount that your customer needs to pay you. If you have your calculations in step 4 accurately, then this will be a breeze.

You will notice in an invoice the “total” is usually made bold and enlarged so the customer can see the payment needed to be made at a glance.

5. Mention payment terms

Mention payment terms

Payment term is a list of a few things that your customer needs to keep in mind while paying for an invoice. And this is important to include because unmentioned expectations can bring inconvenience that you may not like.

Here are a few things that you can include:

  • Payment due date
  • Late payment charges
  • Payment methods accepted
  • Currency accepted

There you have it. The first invoice that you created. Check it out.

First invoice

Why Do You Need to Create an Invoice?

The invoice shows that you are transparent and professional and serves as a record for your business. You need an invoice to keep track of: 

  • Customers who owe you money
  • Accounts receivable
  • Overdue payments
  • Income tax

However, it isn’t just for you. It also helps your customers to track what they have bought and how much they owe to your business.

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InvoiceOwl helps you create, send, manage, and track invoices with ease from anywhere.

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How to Send an Invoice?

Creating a professional invoice is just one part of the invoicing process. And upon doing that, you also need to send it. Here is how:

  • Choose the right method
    Select a method that is convenient for both you and your client. You can use email services such as Gmail or messaging apps like Whatsapp or Messenger.
    We recommend you go with email as it is the more professional of the two.
  • Customize your message/email for delivery
    Assuming that you went with the email, now you will have to create an attention-grabbing subject line and a short message to accompany your invoice. 
    This increases the chances of your email getting read rather than lost. Here is a sample email template to give you an idea:
Email template to send invoices

Subject: Invoice for Your Purchase From [Business Name]

Dear [Client Name],

Please find attached the invoice for your purchase.

Total amount due: [Amount]

Payment Due Date: [Due Date].

Let me know if you have any questions. Thank you.

Best regards,

[Your Name]

  • Send a reminder
    If payment is past due, send a polite reminder for it. This can be done manually through email or automated using invoicing software.
  • Keep a record
    Once the payment is made, record it somewhere like a spreadsheet to avoid any confusion later on.
Frequently Asked Questions
  1. What is the difference between an invoice and a receipt?

    An invoice is a request for payment, sent before payment is received. A receipt is proof of payment, sent after payment is received. Thus, some areas are excluded in receipt such as:

    • Due date
    • Payment terms
    • Accepted payment methods

  2. How to get more customization options while creating invoices?

    Invoices templates are great but they come with their own limitations. Thus you can try our free invoice generator to enjoy more customizations.

    For a full-fledged invoicing solution, try InvoiceOwl which not just helps you with creating an invoice, but also sending and managing them easily.

  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 seems unreliable. And using doing so might also harm your brand image.

  4. When should I send an invoice?

    You can send an invoice as soon as a customer purchases something from you. If you provide some services, you can pre-decide with your client on the length of every billing cycle. For example, a week or a month.


There you are. Now you can easily create professional invoices for free using the steps we just discussed. This will help you improve your brand image and get paid faster. So, have you tried creating one for your business using a free invoice template?

Author Bio
Jeel Patel
Jeel Patel

Jeel Patel is the founder of InvoiceOwl, a top-rated estimating and invoicing software that simplifies the invoicing and estimating processes for contractor businesses. Jeel holds a degree in Business Administration and Management from the University of Toronto, which has provided him with a strong foundation in business principles and practices. With understanding of the challenges faced by contractors, he conducted extensive research and developed a tool to streamline the invoicing and estimating processes for contractors. Read More

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