You’ve founded your business and you’ve sold products or services to clients and customers. That implies they have to receive an invoice. But how do you write one?
The term invoice means the client owes money to the vendor after a transaction of products or services. When the purchase is made, the seller delivers the product or services and the buyer now owes money to the seller.
It is also a commercial document issued by a seller to a buyer, relating to a sale transaction and indicating the products, quantities, and agreed prices for products or services the seller had provided the buyer. Payment terms are usually stated on the invoice.
What needs to be present in an invoice?
An invoice is a document that describes how much money does the buyer owe and what was included in the purchase.
- Date of the invoice - The date when the invoice was created
- your customer’s company name and address, including a contact’s name so it reaches the right person
- your company’s name, address, and contact details
- Payment terms - When the invoice must be paid, charges for late payment, payment method, the bank account of the seller
- Total amount to be charged and the currency
- Unique invoice number
- List of products with descriptions, rates, quantities, and taxes. These descriptions don’t need to be long, but they should be detailed enough for your customers to know what it is they’re paying for. After all, if they have no idea what they’re being charged for, they’re more likely to question the invoice – leading to a delay in payment.
- Other information to help process the invoice (purchase order, bank transaction reference code for identifying the buyer)
Delivery of the invoice
The seller makes the invoice and then sends it either via email or postal services. It is also perfectly fine to deliver it in person. Once the invoice is delivered, then the seller just needs to wait for the payment.
If the buyer does not make payment in the expected time, a reminder email must be sent as soon as possible. If the email does not have any effect, pick up the phone and call the company and inform about the late payment for an invoice. If the buyer refuses to make the payment, there are few possibilities, and of course, it is always a good idea to talk to a lawyer. Keep reminding the buyer and hope they will pay the invoice Sell the invoice to a debt collection service, when you sell the invoice, you will get less money back, but you don’t have to worry about it anymore.
What are the tools for making an invoice?
- Spreadsheets Software such as Microsoft Excel, Apple Numbers, LibreOffice or Google Spreadsheet. They all are perfectly fine for creating an invoice
- Word processors such as Microsoft Word, Apple Pages, Google Docs
- Pen and paper This is the way business created invoices for hundreds and hundreds of years, and it is still a valid way to create an invoice.
- Plain email You can write the invoice as plain text on an email, just make sure it has all the necessary information
What about invoice software?
The good news is the world becomes increasingly digital, you can use invoicing apps to take the stress out of creating your invoices and sending them to customers. Have a look at Docbrew!