How to Write Invoices the Right Way

The invoice should speak for the client and the job you did for them. If the client cannot instantly identify what they are being charged for, it is very likely your invoice to end-up into the ‘deal-with-later’ pile.

What should an invoice look like?

How many times have you received an invoice or bill that looks all mixed up with bad layout and information scattered all around? Well, we’ve received them quite too often. Some of the bills we get are so unclear that we literally have to beat our brain out in order to understand what they’re charging for.

But your business doesn’t have to be like that. When it comes to preparing your legal and business documents you should never neglect their look & feel. Those are important just as the services or products you provide and receive payments for. Crystal clear invoices will not just make you stand out from the crowd, but will also get you paid faster.

The look and language of your invoices should be in keeping with the rest of your branding and the message you’d like to deliver. It should match your business card design, letterhead, tagline, even your site colors. Even though the invoice structure is industry dependent, there are some general elements and rules that should be followed. To remember this easier, you can divide the invoice into 6 different sections:

  Start creating automated
invoices with Invoicebus

Section 1: Your details

Contains details about your company (or your full name if you’re freelance), company logo, contact details, payment info etc.

If your company holds a specific legal status, for example, if in the US it’s a corporation, or in the UK it’s limited then you should include the information specific to your jurisdiction. That usually means an official address and registration number, but rules vary so check with your local tax office. In Europe, if you’re V.A.T. registered, you must include your V.A.T. number as well.

Create an Online Invoice Now!

Section 2: Rules of the game

Here you should specify the invoice options such as issue date — date of the invoice, net terms, due date, currency, and P.O. Number.

In business, the term net 30 is used to indicate payment within 30 days, or it’s fairly common to see 10/15, net 30 which is another way to say 10% discount if paid in 15 days, and net due within 30 days.

However, people who are less aware of business terminology may not know what this means, so depending on who your buyer is, it may be better to use plain English instead: “Please note that payment is due on or before 07/09/2015″.

Another term that may also cause confusion is “Upon Receipt”. The accounting company Freshbooks produced an interesting study which says that many people seem to interpret this as “whenever you feel like it”.

“It’s as if they receive an invoice with the words ‘payable upon receipt’ and immediately dump it into the ‘whenever’ pile. Instead, using specific terms such as ’21 days’ seems to focus the client’s mind around a specific timeframe and will actually get you paid faster than asking for immediate payment.” — Zach Mathew

Create an Online Invoice Now!

Section 3: Your client

This part contains the name and address of the customer you are invoicing.

If you’re addressing a multi-office company you need to specify the right person or department (you can write “Attn: Fred Flint”, which means attention).

This may not be the person you’ve been communicating during the project, so in order to get paid faster, make sure to ask who will be dealing with paying you. A company with three employees can easily figure out what you’re doing; but in big companies, invoices get misplaced, especially if there’s confusion over who belongs to which project.

Create an Online Invoice Now!

Section 4: Title and number

Usually, the word Invoice indicates the title, but depending on the type, it can also be Bill, Tax Invoice, Pro-Forma, Quick Invoice etc. If in doubt, stick with Invoice. The number of the invoice is a unique reference ID and is used in case of correspondence.
The rule is to never use the same number for multiple documents.

In some jurisdictions, it is mandatory that your invoice numbers ascend chronologically. But, they don’t have to be consecutive. If you don’t want your client knowing how much work is crossing your desk consider increasing the invoice number by a random number every time you write a new invoice: your first invoice would be ‘00007’, the next would be ‘00012’, then ‘00014’ and so on.

Create an Online Invoice Now!

Section 5: List of products and/or services

The itemized list should clearly describe what you are charging for — name/description of the product or service, quantity, unit price, discount (usually given as a percentage), tax and the total amount charged.

The description should match the terms you have agreed with your client, so be as specific as possible. Always double-check for typos, grammatical or computational errors as they create a poor impression and can damage your reputation. In fact, triple-check your invoice before sending it out.

Another thing you should consider is the quantity and unit price entries and check what the rules are. For example, for UK businesses, if your company is VAT registered HMRC rules about VAT invoices say that you must include the price per unit on your invoice.

If you charge by the hour you might specify the number of hours you have spent as well as your hourly rate. Subtotals and totals with a breakdown of taxes should be calculated below the table.

Create an Online Invoice Now!

Section 6: Mambo jumbo

This is a box for your custom message or note that describes your invoice terms more thoroughly. For example, if you accept more than one payment method, here you may specify which one you prefer. Is it a check, bank transfer or PayPal?

Although a late fee is not our preferred way to ask for on-time payment, keep in mind that here you can specify this too. For example: “Interest accrued at 5% per month thereafter”.

Create an Online Invoice Now!

Pay special attention to your invoice design

Lots of people spend hours on their website designs, business cards, logos and resumes, but neglect the importance of a properly designed financial document.

Often times they forget that the invoice is their last contact with the client, and see it only as a mean of payment.

But what if you could use it as a marketing weapon to reinforce your branding, boost your reputation, win more work, and most importantly - encourage on-time payment?

Using psychology patterns and design principles, the wording, the layout, and the color of your invoices can be tweaked to speed-up your payment.

While you should definitely use your default branding, logo, and colors, you could also utilize few psychology tips to stimulate quicker payment.

Create professional looking
invoices with Invoicebus

Just imagine how it would feel if you could make your invoice stand out among hundreds of others. Below are given few eye-catchy examples that are definitely hard to ignore.

   

Tired of manually creating invoices
with Word and Excel?

Start creating automated
invoices with Invoicebus