It may look simple but creating an invoice can actually be quite a daunting task. After all, you want to make sure that you did send the product (Or provided the service) and the other party received it.
On the other side of the spectrum, the importance of an invoice is uncanny. Especially when it’s time to get a refund for a faulty product or an item not received in the first place. If you’ve ever been in this situation, you already know the importance of it.
How to make an invoice?
When you’re designing an invoice, you want to make sure that everything is made out clearly for both parties. At least that’s what you should find in a true professional invoice maker.
Although there are usually two people involved, the buyer and the seller. There could be more people involved than that.
If so, make sure that anyone who was part of the transactions clearly laid out in your invoice. Make sure the payment break down is all proper.
The objective of an invoice is to be clear and it’s usually something given before your payment. It’s a record that basically means you are owed money and it better be paid fully by your client or customer. As a small business owner or freelancer, the last thing you would want to do is chase your client for your payment.
When designing an invoice, you do want to make sure there are certain things that are always there.
The date has to be there. There are no ifs and buts about it. After all how would you know when this invoice was issued?
So a date serves as a mighty reminder of when the payment was received just in case there are any legal cases that you might get involved with in the future.
Invoice Due Date
Usually, this date is the same as the invoice date but if you plan to get paid later (Which we highly discourage), make sure you put the invoice date on it. Always remember, a slave gets paid later, a boss gets paid first.
Obviously sometimes you have to do what’s best for your situation but try to get to the boss level as soon as you can.
Reason for Invoice
This is where you basically talk about what you pay for or what the payment was sent for. After all, the invoice was issued for something right?
Well, that’s what you write in here. This is usually written in bullet form or in a line or two max.
Here you also show the clear quantity or the weight if necessary of the product provides it.
If it’s a service, make sure you’re really clear about what you did and if there are any other variables involved, like the number of times the service was performed etc.
Just like you would do with an invoice, you want to make sure that there’s a transaction number or an invoice number that is on your invoice. This is how you will track your invoices.
On an invoice, only your address is required. Or address of wherever the invoice is issued. It’s not like a contract where you have to showcase the addresses of all parties involved. The address is usually put right under the title of the invoice or at the bottom of the invoice.
When issuing an invoice, Time is also something that is displayed in almost 90% of the cases. The reason for this is related to tracking the invoice if need be in the future. The time displayed also serves as a further seal that proves an invoice authenticity.
Your business name usually goes on top of everything or is at the bottom. Regardless of where you put it, make sure it appears clearly on your invoice. For the receiver, you want to make sure also the business in question has their name on it in a very clear way as well. This simple move may help you avoid any future conflicts.
At the end of the day, an invoice is one of the most important part of a transaction especially if you’re sending a payment. A good rule of thumb is to always hold onto your invoices because you can even use them for tax rebates or tax credits.
If you can get the employee’s number who issued you the invoice would be even better.
Some businesses just leave their logo on the invoice instead of their business name. As long as you have one of them, you should be good to go. Having both is considered best practice though.
So as you can see, although making an invoice might look pretty simple. It can be quite technical.
One thing is for sure, if you ever want to prove that you paid for something, you my friend, better have your invoice.
If you are working with a proper company, make sure they ask you for your GST number. Of course everyone’s taxes is their own business but if the party or company you are about to invoice doesn’t ask for a GST number, that might be a red flag.
Not necessarily but something to keep an eye out for sure. A GST number is usually shown on the top right of an invoice.