How to Make a Professional Invoice: Step-By-Step Guide and Expert Tips
So you’ve sold a product or provided a service on your online store and now it’s time to get paid. Great news! The best way to request your money is by creating an invoice that’ll let your client or customer know exactly what you’re charging and when the payment is due.
But what is an invoice, how do you create one and what information do you need to include? We’ve got you covered with this step-by-step guide to writing an invoice.
What is an invoice?
An invoice, also called a sales invoice, is a document to bill a customer for the sale of your products or service. An invoice establishes an accounts receivable that obligates the purchaser to pay. Think of it as an official agreement in writing between you (the seller) and your customer or client (the buyer).
Invoices are also a great way to keep track of your business’ earnings. Aside from keeping your finances in order, using written invoices maintains transparency and simplifies accounting when tax season comes around.
What’s the difference between a bill and an invoice?
Technically, nothing. A bill and an invoice both refer to the document used to let a customer or client know how much money they owe for a product or service. But the main difference between the two terms lies in who’s referring to the document.
First, let’s define both words:
Your business will issue an invoice to a purchaser outlining the sale of products or services and the amount of money owed in return. An invoice serves to:
Document a business transaction that requires payment from a customer
Request payment from a customer by a certain deadline
Keeps a record of services and products sold for bookkeeping
Your customer receives a document from you that outlines the amount of money owed in exchange for goods and services. A bill:
Let’s a customer know of how much they need to pay you
Gives your customer a record of their expenses to use for bookkeeping
As you see, the business will often refer to the document as “an invoice” while the buyers receive “a bill” that details what they owe. The process works like this:
Step 1: Your business sends an invoice to your customer
Step 2: The customer receives the bill
Step 3: The customer pays the amount owed
Step 4: Finally, your business issues an invoice receipt as proof of completed payment.
What are the key legal requirements for an invoice?
There are many important details to include if you want to create a thorough and professional invoice. Here’s everything your invoice should include:
Your business name: The official name of your business and your tax ID number. Include your business logo to look more professional.
Your customer’s name: Identify your customer, include their name or their business’ name and their tax ID number.
Contact details: Write your address and phone number as well as your customer’s contact information. This is especially useful in case either side needs to get in touch.
Invoice number: An invoice number helps track your invoices, so you don’t get them mixed up. (Pro tip: Easily track your invoices with an abbreviated version of your customer’s business name with a dash followed by the month and year. For example: Invoice WIX-0520)
List of services and costs: An invoice generally contains the items purchased, either products or services, as well as prices and quantities. Enter as much detail as possible to avoid any confusion. For example, if you provide a service paid by the hour, detail the amount of time it took to complete a task. Include a separate line for VAT or wire transfer fees (if applicable).
Dates: Your invoice should specify all the relevant dates, including the day the invoice was issued, the date when the sale or service took place, as well as the time covered by the invoice (for periodic invoices).
Total amount: Create a clear line showing the entire amount your customer owes you. The total amount should cover all products and services included in that invoice. Don’t forget to include any extra fees before calculating your total.
Payment information: Include your bank information so your customers will know how to pay you. Many customers also use third-party payment processors, like PayPal or Transferwise, that only require an email address, rather than sensitive information like your bank details.
Terms and conditions: Write the agreed-upon terms between you and your customer on every invoice. This could mean your rates, return/refund policies, product warranties, shipping information and privacy policies.
Due date: Avoid confusion later on by writing exactly when you’re expecting the payment. Be specific: Write “May 31, 2021.” Don’t write “Due in 30 days.”
Pro tip: Create a consistent timeframe for all your invoices in order to easily know when to expect your money. Generally your customer should pay you within 30 days from the invoice’s issue date but you can make it shorter or longer depending on the nature of your business and the total amount owed.
5 tips to keep your invoice looking professional
Think of an invoice as another face of your business. An invoice is a professional way to build brand trust that lets customers know they need to pay on time. Keep these 5 pro tips in mind:
01. Include branding
Add your logo to the invoice to keep your branding consistent. Don’t have one yet? Create a custom logo for your business using a logo maker.
02. Create or use an invoice template
Create your own template or use an already made one. Then keep the structure and look of your invoices consistent so your customers or clients can easily recognize it and find the information they’re looking for. You can achieve the same effect by using an invoice generator as well.
03. Check spelling and look for mistakes
This may sound obvious, but you’d be surprised how many businesses don’t do this! Having to make corrections and resend invoices can make your business look bad in front of your customers. So double and triple check your invoices for any mistakes before sending.
04. Offer multiple payment options
If you want to make sure your customers pay on time, and quickly, it can help to offer a variety of secure payment options, including digital wallet, credit card or wire transfer.
05. Say thank you
It’s always a good practice to end your invoice by saying “Thank you for your business”. Feel free to be authentic and tell your customers what they mean to you. It can even increase the likelihood of payment by 5%.
How do I create an invoice?
Create an invoice with an invoice generator
Luckily it’s easier than ever to create an invoice. In fact, you can create a professional invoice in minutes using a free invoice generator. Just follow these simple steps:
Step 1: Add your information
Include the key details for both you and your client/customer:
Name or business’ name
Contact information such as phone or email address
Step 2: Describe the products or services your charging for
Under “Invoice Settings” include the invoice number, date of issue and payment due date. Add a line for each product or service with a description. Then add:
Price (or hourly rate)
Quantity (or number of hours completed)
Discount (if applicable)
Any additional notes or terms
Step 3: Finalize and send!
Wix’s Invoice Generator will automatically calculate your total. Before you send, make sure all the information is correct. Once you’re ready, you can choose to email it straight to your client or download it.
Step 4: Issue an invoice receipt
Once your customer completes payment, you can follow-up with an invoice receipt. This’ll help you keep track of all payments received.
Create an Invoice From Scratch
If you want to create an invoice without the help of a generator, follow these steps to make an invoice from scratch:
Step 1: Open a blank spreadsheet
Step 2: Create a branded invoice header
Add a header to your invoice with your brand’s details and billing information including:
Business contact information
Step 3: Add your client’s information
Include your client’s contact details such as their company name, name of relevant contact, address, email and phone number. For example:
555 Address Rd.
City, State 55555
Step 4: Add the payment due date
Near the top of the invoice, include the day, month and year that the payment is due.
Step 5: Add an itemized list of sales
Here, you can create a table with each column outlining the specific services provided and/or goods sold, date of order, the cost per unit, number of units sold and total amount due. Make sure to specify currency. For example:
Step 6: Calculate the total
Include a final column to calculate the total amount due for the invoice. Many spreadsheets will do the math for you, such as Excel’s SUM function. Don’t forget any relevant discounts, service fees or tax rates in the total.
Step 7: Add payment details
Add relevant payment information, such as PayPal ID. For a bank wire transfer, include your name, account number, IBAN (or SWIFT code), bank and bank address. Include a personal note on the bottom, such as “Thank you for doing business with us!”
Check out this invoice example for inspiration:
Ready to receive payments for your hard-earned work? Create professional, custom-made invoices in minutes with our free Invoice Generator.
Head of Product, eCommerce at Wix.com
Tamar has spent over a decade in product leadership with dynamic B2C companies, and is an established innovator in the field of eCommerce. As the head of product for eCommerce at wix.com, Tamar builds the tools that enable over 700k online stores worldwide.