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How to Create an Invoice

After you’ve provided goods or services to a customer, it’s time for the next step – sending the invoice. But do you know how to create one? Whether you’re an early-stage start-up or you’ve been in business for a while, producing the perfect invoice is an important part of your payment process. Here’s a simple, step-by-step guide to writing invoices: 

1. Decide how you want to create your invoice

There are several ways that you can create an invoice. Many people decide to put it together on Word, Excel, or Google Docs. You can do this manually if you want, but depending on what program you’re using, there may be templates installed already. Alternatively, there is a broad range of free, customisable templates available online. 

2. Ensure your invoice is clearly marked

It’s important to label the document as an invoice, as this may help speed along the payment process. You also need to include a unique identification number on your invoice, which helps you to identify transactions. The unique identification number can be structured in any way you want – while it can also contain letters and numbers – so many companies include specific information such as the date of issue or name of project.  

3. Include company name, address, and contact information

Another important element of the invoice is company information. You need to include the name, address, and contact information of both your company and the company you’re invoicing. If you’re a limited company, you should also add your company registration number and the formal registered name of your company. 

4. Add a description of the goods and services you’re charging for

You also need to add a short description of the goods/services you’re invoicing for. It doesn’t need to be too long, but it should contain enough detail for your customers to know exactly what they’re being charged for. This way, there’s less likely to be unwanted follow-ups from your customer and your invoice will be processed more quickly. As well as the description, you should add the quantity and price of each item. 

5. Include dates

Dates are another essential part of the invoice. There are a couple of dates that need to be included somewhere on the invoice: 

  • Date the goods/services were provided, also known as the supply date

  • Date of the invoice

6. Insert the amount of money you’re charging

In addition to the cost of the individual goods/services, you need to add the total amount owed. If any discounted rates were agreed with the customer, these should be noted and subtracted from the total cost. 

7. Make sure payment terms are enclosed

Finally, you need to include payment terms. This means that the following pieces of information should all be included within the invoice: 

  • Accepted forms of payment

  • Accepted currency

  • Late-payment penalties

  • Due date

If you don’t let the customer know when you expect payment, it’s likely to cause issues down the line, so payment terms are a major part of any invoice. 

8. Double-check everything’s included

So, just to recap, here’s all the information you need to include in a standard invoice:

  • Unique identification number

  • Your company’s name, address, and contact information

  • Your customer’s company name, address, and contact information

  • Description of the goods/services you’re charging for

  • Date the goods/services were provided (supply date)

  • Date of the invoice

  • Amount charged

  • Total amount owed

Check those off your invoice one by one, and if they’re all there, then you’re good to go. 

What about VAT invoices? 

If you or your customer are VAT registered, you need to use a VAT invoice, rather than a standard invoice. There are a couple of different types of VAT invoice: full invoice, modified invoice (for retail supplies over £250), and simplified invoice (for retail supplies under £250). Different information is required depending on which form of VAT invoice you need to use. Generally, you should include everything we’ve listed for the standard invoice, as well as the following items: 

  • VAT registration number

  • Tax point (or “time of supply”) 

  • Total amount excluding VAT

  • Total amount of VAT

  • VAT rate charged per-item (as well as notes for any exempt items)

Can I create an invoice with invoicing software? 

Yes, if you don’t want to create the invoice yourself, there are a broad range of paid and free invoice software programs that can do the job for you. Many accounting and invoicing tools integrate with GoCardless, so shop around and find one that’s perfect for your company’s needs and budget. 

Interested in automating the way you get paid? GoCardless can help

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