Learning how to make an invoice is a crucial first step for starting a business — but it can also be a real source of stress for the budding entrepreneur. What should you include? What’s just clutter that should be avoided?
An invoice can say a lot about your business, so it’s key to learn how to make an invoice the right way.
But don’t stress — you got this! Use this guide to help ensure your invoices check all the right boxes and leave a favorable impression with your customers. Ready to dive in? Let’s do this!
Disclaimer: This content should not be construed as legal or financial advice. Always consult an attorney or financial advisor regarding your specific legal or financial situation.
Why is it important to create a good invoice?
As a small business owner, knowing how to make an invoice is essential for the success and growth of your business. A well-crafted invoice not only ensures that you get paid on time, but also reflects professionalism and attention to detail.
By clearly outlining the products or services provided, the cost, payment terms, and due date, you are setting clear expectations for your customers.
This can help reduce the likelihood of any misunderstandings or disputes down the line. A good invoice also helps you keep track of your finances, making it easier to monitor your cash flow and stay on top of your accounts receivable.
Additionally, a professional-looking invoice can enhance your brand image and leave a positive impression on your customers, potentially leading to repeat business and referrals.
So take the time to create a good invoice that reflects the quality of your products or services and the professionalism of your business. (Your bottom line will thank you.)
How to make an invoice that can help boost business
A good invoice includes all the important details of a transaction, while avoiding unnecessary clutter. Some business owners might prefer the old-school route, printing out their invoices and mailing them, while others go with email attachments like a Word document or PDF.
Meanwhile, platforms like GoDaddy Payments make it easy to create and send professionally branded invoices via email or payment link, and include invoice templates to streamline the process.
While the ideal invoice might look different from one business to another, there are a few essentials to include as you figure out how to make an invoice.
Let’s take a look.
1. Invoice number
The invoice number is important for both the seller and the buyer to keep track of payments and transactions. To optimize this, use a unique numbering system that is easy to follow and understand, such as including the date or customer's name in the invoice number.
2. The date
Including the date on an invoice ensures that both parties know when the transaction took place, helping to avoid any confusion or disputes. Consider using a standardized date format to make it clear and easy to read.
3. Payment terms
Clearly outlining the payment terms on an invoice helps to establish expectations and avoid any misunderstandings. It’s often ideal to offer multiple payment options to accommodate different preferences, and clearly state any late fees or penalties.
4. Business name/contact information
As you learn how to make an invoice, don’t forget the basics! Providing accurate and up-to-date contact information on an invoice is crucial for both parties to easily communicate if needed. If you use email to send invoices, this is likely sufficient, but also consider including other details like a phone number or physical address.
5. Details of goods or services delivered
Including detailed descriptions of the goods or services delivered helps to clarify what was provided and avoid any discrepancies. Ideally, use a separate line item for each product or service, including quantities, prices, and any relevant information.
6. Total amount owed
Clearly stating the total amount owed on an invoice is essential for the buyer to know how much they need to pay. To dial this in, consider highlighting the total amount in a prominent position on the invoice, and include any applicable taxes or fees to avoid any surprises.
Ready to start creating your own invoices?
Nice work learning how to make an invoice! We’ve covered the reasons why solid invoicing is key for a business and looked at some of the most important components of a good invoice.
The whole process gets easier once you get started and do it a few times. An automated invoicing software can make the invoice creation process easier, streamlining your workflow and saving time. And before you know it, new business owners might start asking you how to create an invoice for their own operations!
FAQ about how to make an invoice
Do businesses have to make invoices?
Yes, businesses are typically required to create and issue invoices for the goods or services they provide to customers.
How do I create a PDF invoice?
You can create a PDF invoice using accounting software, online invoicing tools, or simply by converting a Word or Excel document into a PDF format.
Do customers need invoices?
Customers may need invoices for record-keeping, tax purposes, or for reimbursement from their employers.
What’s the difference between an invoice and a receipt?
An invoice is a bill issued by a seller to a buyer for goods or services provided, while a receipt is a document acknowledging payment received for those goods or services.
