Dude, What’s an Invoice?
You’ve made your first sale and it’s time to get paid. That means it’s time to invoice the client. What exactly does that mean? You know you need to send your client something, but you’re a little unsure of what you need to include on your invoice. We’ve covered invoicing software in the past, and today we’re going to spell out exactly what you need to include on your invoice.
What exactly is an invoice though? An invoice is physical or electronic document identifying the price for services. This lets your client know how much they need to pay you and what they are paying you for. It’s important to remember that an invoice can be seen from two perspectives, you as the seller, and them as the purchaser. You see the invoice as your sales invoice, and to the purchaser this is the product invoice. You also set terms on the invoices for the payment, it can be due on a certain day in the future, it can be due on receipt (meaning right now).
Clarity Is Key
It’s important to be clear on the differences between an invoice and a receipt. An invoice is not a receipt, nor a receipt of payment. As defined above, the invoice is just the seller-prepared document informing the buyer of the service they are requesting and the price. A receipt is what the seller prepares after the invoice has been paid. In the case of the invoice being for a tangible good (rather than a service) the receipt typically shows proof of ownership, and of course that the item is paid in full.
The Characteristics of an Effective Invoice
Now that you know what an invoice is, it’s time to lock down what you cannot forget to include on your invoice. Make sure your invoice has:
- Your company name and information (If you’ve included your logo even better!)
- The buyer’s name and contact info
- Invoice number (make sure you can keep track!)
- Invoice Date (What day you sent the invoice to the seller)
- Description of the product(s) or service(s)
- Cost of product(s) or service(s)
- Terms of payment (how long, when, what payment forms taken)
- An order total
- Tax (if applicable)
- Due Date for Payment
- Notes (throw in a comment thanking them for their business, that’s a nice touch!)
Seems like a lot to include, right? Many invoicing software programs allow you to create a template once that you can then populate with new information each time you use it, saving you time and energy each time.
Have any tips for putting together invoices? Maybe you have a favorite software you use for building out your invoices? Share them in the comments!