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How to make an invoice that will get you paid

Article provided by Xero

Find out how to make an invoice that will be accepted by your most fussy customers. This guide takes you through the basics of raising an invoice and putting all the right information on it.

The etiquette of raising an invoice

Make sure your customer is expecting your bill. If it comes out of nowhere, they may be slow to approve it, or even annoyed. Explain your process before you supply anything, so they know when to expect your bill. If you don’t have an agreement in place, at least tell them when an invoice is about to be sent.

What information goes on an invoice

  • Information about you
    Your name, address and contact details. Freelancers can use a personal name, otherwise use your business name.
  • Information about the customer
    Add the customer’s name and contact details. If it’s an organisation, confirm their legal name. It could be different from the brand name you’re familiar with.
  • Details about what was sold
    List the products you supplied, their prices, and the quantities of each. Or list services, with professional fees against each.
  • The cost
    Total all your charges, making sure to apply any discounts you’ve offered. Add sales tax at the end.
  • The customer reference
    If your customer has given you a reference or purchase order number, include it. This will increase your chance of being paid promptly.
  • Instruction on when and how to pay
    State when the invoice is due, and be clear if there are late fees (or on-time discounts). Tell them which types of payment you’ll accept and give the information they need to make those payments, such as a bank account number or a link to online payment.

How to create an invoice number

An invoice number can be anything – and can include letters – as long as none of your invoices have the same number. You can simply number them sequentially – INV-001, INV-002, INV-003, and so on.

If you want your invoice number to be more informative, you could:

  • give each customer a separate code (Vandelay Industries becomes VAN)
  • create a job number for each project (001 for cleaning their sales offices and 002 for cleaning the factory offices, for example)
  • include the invoice date (using the yyyy-mm-dd format will make it easier to group jobs this way)

So for cleaning the factory offices on January 21, 2018, you’d make an invoice with the number VAN002 – 20180121.

Invoice details – how much is too much?

Always provide a description of the goods or services supplied, so the customer knows what they’re paying for. But don’t add so much detail that it slows down your invoicing process. Here are some guidelines to help you make an invoice that’s straightforward:

  • Use language from your original quote so the customer can see you’re delivering on your promise.
  • Be as concise as possible. You can keep a more detailed record of the work in a private diary, but don’t put it into the invoice unless you’re asked for it.
  • If a customer requests a lot of detail, add it as an attachment. Keep the invoice itself to one page if you can.

Now you know how to make an invoice

  • Open your invoice template
  • Create an invoice number and add the date
  • Fill out information about you, the customer, and the goods or services
  • Total the costs and double check your maths
  • Send the invoice
  • File a copy for your tax records

Learning how to make an invoice is simple, but it’s just a document at this stage. If you want to get paid, there’s more work to do. Get more in our guide to an awesome invoicing process.

Xero is a proud Partner of the NSBC.