When I first started out with my business I knew creating invoices would be key to show to my clients if I wanted to collect payment for the services I provide. This lead me to research on what other businesses were including on their invoices. Most of them were straight forward and had items such as the date, amount due and the invoice number. I also found that many companies were not consistent with their invoices and left out some crucial information such as the payment due date.
If you are looking to create your own invoices there are many resources online that can help you with this but it is vitally important to know the must haves for submitting an invoice. If you are in the process of drafting an invoice template or you are considering revising a template that already exists, I recommend including the following items on the invoice.
- Invoice Number
- Client Name
- Client Address
- Your Name
- Your Business Address
- Title of the Project
- Price of the Project
- Itemize the services (optional)
- Sales Tax Amount
- Final Total Due
- When is payment due (Net 15/30/60)
- Additional Notes
If you would like to see sample of one of the invoices I send out to my clients you may be so be visiting this example invoice link.
In order to stay organized there should be some type of invoice tracking place. Whether it is an excel spreadsheet, online software or other method, including the invoice number is paramount. The invoice number should be sequential with every release of an invoice. This is helpful because when you are reconciling who has paid you and who has not referencing the invoice number when speaking the to client will keep everyone on the same page. This is especially true with clients you have invoiced multiple times.
This area should contain not only the name of the business or company you are working with but it should also reference a specific person if possible. The client name holds someone responsible for handling your payment, this is normally the point of contact that you have been working with throughout the project. You will also want to make sure you include the name of the business and a person so that if the invoice is mailed it will not be lost.
In the odd case that the invoice is opened by the wrong person the client address should also be listed on the invoice. This reinforces the fact that the invoice is indeed for the company that received it. Make sure to call or email ahead of time to make sure that the address of the business is correct and has not changed during the duration of the project.
Earlier I mentioned that the client’s name should be on the invoice and the name should be the point of contact. In the same manner your business name should go on the invoice as well as the point of contact within your company that the client has been working with.
Your Business Address
Make sure that you place the address of your business on the invoice as well. Ensure that the address is a mailing address that can receive mail and is directed to a mailbox that is checked frequently.Even though payments can be made online some companies still prefer to mail out checks when making payments because it helps them have a paper trail of records. Place the name, address, zip code and even a phone number of your business on the invoice.
Title of the Project
Ensure that title of the project is relevant to the work that is being performed. When a client receives the invoice the title should be clear enough that if another person in their organization picks up the invoice they can at least know that the charge is for and perhaps what it relates to. Think about it, if your main point of contact for a business you at working with leaves then company how can you ensure you will be paid? Having a clear title of the service provided and purpose can go a long way.
Price of the project
In this area you will want to list out the pricing of project. It is customary to state the total cost of the project, the project title and also to write a brief description of the service provided. The description is key because it serves as a reminder of what the project was for. Think from the perspective of someone who you never spoke with or has never heard of the project, would they be able to understand what the service was for if they picked up the invoice and read the description?
Itemize the services (optional)
If the project has multiple items they can be listed out on the invoice item by item. Itemizing your invoice is a great way to show clients the range of items that you have provided for them. I will admit I do not always itemize lines on the invoice. The reason I do not always list out items is due to the fact that it can be difficult to itemize certain services. For example should you itemize a website design project? How would you separate the different parts of it? Does the testing phase, design phase, implementation phase all have different pricing? If you do choose to itemize make sure prices for each line are consistent throughout the project.
The subtotal is normally the final amount of all of the services that were provided to the client. This is customarily the amount prior to any taxes or late fees on an invoice.
Sales Tax Amount
Always list the sales tax separate from the price of the project. Do not put the final price and sales tax together so that the numbers can “look round and pretty.” It is important to show this area separate so people can know what they are paying in sales tax. Separating out sales tax also help you be more more organized for your records and if audited you can clearly show where you charged each client sales tax.
Final Total Due
What is the total amount that you are anticipating from the client? Whatever that amount is it should be included in this area. This number should be the sum of the price of the services, sales tax, as well as any late fees or discounts.
When is payment due (Net 15/30/60)
When sending out an invoice it is important to note that not every business handles the payment of an invoice the same way. Some businesses choose to pay an invoice as soon as they are received, while others pick a certain day in a month to pay out who they owe. Stay in the drivers seat as much as possible control when you would like to be paid, especially if you have already provided the product or service. Specify before beginning work and when you send the invoice that payment is due 15 days, or 30 days after the invoice is received. Ask your client if they are on a certain payment cycle as well.
I always include a note section on the invoices I send. I can place updated notes based on a verbal conversation or even mention when payment is expected in this area. There is a word of caution, an invoice is not a contract. If there are certain updates made to the project or the scope of the project has changed update the official contract and notify them of the agreed changes or pricing before sending out the invoice. You do not want there to be any confusion.
These are the items that should be a part of every invoice. There are some online services that allow you to send out invoices electronically and they are also great for keeping records:
A free invoicing system and invoice templates are available in the Freelance Jumpstart bundle, a step by step guide to freelancing for creatives.