What should be included in an invoice?

Invoicing is a big part of any business from free-lancing to regular contracted work. The finance side of the business can seem tedious but it's important to know how to create an invoice correctly to ensure you are paid for your work. A well designed invoice that covers all required information will show professionalism to clients or customers.

What is an Invoice?

An invoice is a request of payment, it will include the cost of products or services provided by the seller. An invoice is issued prior to receiving payment. Whereas receipt is an acknowledgment of payment and is issued after the payment has been received.

An invoice serves a legally enforced agreement between business and clients, you will also need them for tracking your finances, accounting and tax returns.

What should I include in an invoice?

• Unique identification number
• Your company name and address
• Company address and name of customer
• Clear description of what your invoicing for
• Date of supply
• Date of invoice
• Amount of the goods
• VAT amount if applicable
• Total amount payable
• Payment terms
• How to pay the invoice

Sole trader invoices need to also include your name and business name along with an address where legal documents can be delivered if you are using a business name.

Limited company invoices must include the full company name that is on your certificate.

Who are you sending the invoice to?

Ensure you know where the invoice is being sent too. Is it a sole trader, a limited company or a partnership. Sometimes some companies have a finance company that takes care of their finances so it's important to check with your contact where to send it. Error in sending it to the correct person can result in late payment

It’s best to send an invoice as soon as the work is completed so you can keep on top of your cash flow. You should send an invoice attached to an email as a PDF to avoid any invoice fraud. You can check with your client what their process is.

Keep Records

Keep organised and keep record of all invoices you have sent out each month this will make it easier for when tax return and self -assesment season arrives.

VAT Invoices

You should use a VAT invoice if you or your customer is VAT registered, this includes more details than a regular invoice.  

You will need to register for VAT if your total VAT taxable turnover in the last 12 months was over £85,000. Speak to your accountant regarding VAT.