What is an invoice?

What is an invoice and what to include in one.


What is an invoice?

An invoice is effectively a bill; it’s a payment demand issued by a seller to the buyer of goods or services after the sale, detailing what goods have been provided or work done, and how much must be paid in return.

Invoices can be used to bill for one-off projects or for recurring work, but they are most widely used to request payment after work is completed, and where there is an ongoing relationship with the customer. Traditionally, invoices came in paper form, either handwritten or typed, then sent by post.

In recent years, many businesses have used email to speed up delivery. But the most tech-savvy firms now employ specialist software to generate e-invoices immediately, with information flowing automatically between seller and buyer.

What’s included in an invoice?

Regardless of how it’s delivered, a standard invoice includes the following elements:

  • The word ‘Invoice’ marked clearly at the top of the document
  • A unique number or reference
  • The name, address, and contact details of the individual or company issuing the invoice
  • The name and address of the person or organisation being invoiced
  • A description of what product or service the invoice covers
  • The supply date of the goods or service
  • The date the invoice was issued
  • The amount of money owed, detailing the VAT sum, if applicable, or any pre-agreed discounts, plus the overall total due
  • The deadline date for payment
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