Are you a business owner who has provided services or sold products to a client and now needs to send an invoice? Unsure about what invoice information should be included? You’re in the right place! In this blog, we’ll guide you through what an invoice is, why it’s important, and the essential invoice information that should be on every invoice. We’ll also explore the different types of invoices. Let’s dive in!
Table of Contents:
What is an Invoice?
Before we dive into what information needs to be added to an invoice, let’s first understand what an invoice is.
An invoice is a document you send to your client to request payment for the services or products you’ve provided. It clearly lays out what services you offered or products sold, how much the client owes you, and when they need to pay. In the U.S, if you’re selling products, you should also add any sales tax that applies. For businesses, especially those registered as LLCs or corporations, it’s common to include your Employer Identification Number (EIN), for tax purposes. If you’re working with clients in different states or countries, tax rules may apply. And always make sure your payment terms are clear, like “Net 30” (meaning payment is due within 30 days). so your client knows when to make the payment.
What Invoice Information Should Be Included?
Now that you understand what an invoice is, Here’s a breakdown of the invoice information you need to include:
1. Your Business Information
- Business name, address, phone number, and email.
- Your business logo, if applicable, for a professional touch.
2. Client’s Information
- The name and contact details of your client.
3. Invoice Number
- A unique identifier for each invoice to help you track payments and records.
4. Date of Issue
- The date when the invoice is created.
5. Description of Services or Products
- Brief descriptions of what services were provided or products sold.
- Include quantities, unit prices, and total amounts for each item.
6. Total Amount Due
- A summary of all the charges, including any applicable sales tax, and the final total.
7. Payment Terms
- When payment is due (e.g., Net 30) and accepted payment methods.
8. Optional: Additional Notes
- Space for any other details, like a thank-you note or special terms.
Below, you’ll find an example of an invoice made using CheckYa invoices. This tool provides you with a ready-made template that includes all the necessary invoice information you need.
How to Assign an Invoice Number on Invoices?
- Invoice #001: Start with “Invoice #001” for your first invoice, and for each new one, just increase the number by 1. This is a simple way to assign an invoice number making it a great option if you’re just getting started.
- INV-20241017-001: In this method, you add the date to your invoice number, making it easy to track when each invoice was issued. For example, if you send an invoice on October 17, 2024, you can format it as INV-20241017-001, where “20241017” represents the year, month, and day, followed by a unique number for that day. If you issue more invoices on the same day, just change the last part to 002, and so on.
- SG-001/SG-002:For clients you work with regularly, it can be useful to include their name or initials in the invoice number. This way, it’s easy to tell which invoices are linked to specific clients.
- SG-A001: For clients with multiple ongoing projects, it can be useful to add a project code to your invoice numbers. This lets you group invoices by project and keeps things more organized. For example, if you’re working on Project A for “Sarah Green Consulting,” you could number the invoices as SG-A001 for Project A and SG-B001 for Project B.
- Use CheckYa for Automated Invoice Numbers If you’d rather automate the process, invoice tools like CheckYa can generate invoice numbers for you. These tools often come with built-in features that automatically follow a logical numbering system, so you don’t need to worry about tracking the sequence manually when invoicing different clients.
How to Write Payment Terms on an Invoice?
Adding payment terms to your invoice isn’t required, but this can help you get paid on time. If you want, you can also include late fees for overdue payments, which encourages clients to pay promptly. In the U.S., late fees vary depending on the state, so make sure to check your state’s rules before adding penalties. Here are some common payment terms you can use:
- Net 30: This means the client has 30 days to pay after the invoice date.
- Net 15: Similar to Net 30, but the payment is due within 15 days of the invoice date.
- Due on Receipt: This means payment is expected as soon as the client receives the invoice.
- Late Fees: If you want to charge a late fee, you could include a term like: “A late fee of 1.5% per month will be added to overdue payments.”
- Early Payment Discount: To encourage early payment, you can offer a small discount. For example: “Get a 2% discount if paid within 10 days.”
How to Create an Invoice?
If you’re looking to create an invoice, a quick and easy option is to use templates available on Google Docs or Google Sheets. These platforms provide basic templates where you can add your business information, client details, and payment terms. Once you’ve filled in the necessary information, you can either download the invoice or share it directly with your client. Here is a guide on how to create invoice templates on google sheets and google docs. While using templates are easy, there are some limitations. You won’t be able to track whether the invoice has been paid, and you can’t receive direct payments through the invoice itself. Additionally, there’s no way to send automatic reminders to clients if they haven’t paid on time.
To create invoices a better alternative is to use tools like CheckYa which offer more functionality beyond just creating an invoice. With CheckYa, you can send invoices and track payment status, such as paid, unpaid and overdue. Another big advantage of using CheckYa is that clients can make payments directly through the invoice through Credit Card, Debit Card, ACH, Google Pay, Apple Pay, PayPal etc, Plus, you can set up automatic reminders for overdue payments, so you don’t have to manually follow up. CheckYa also allows you to invoice in multiple currencies, which is ideal if you work with international clients. You can bill by the hour or by quantity, depending on the type of work you do, and even split fees with your clients if needed.
Conclusion:
Now that you know what an invoice is and what information to include, you’re all set to use this for your next invoice. Tools like CheckYa make it even easier by allowing you to create and send invoices quickly. You can get paid faster with features like direct payments and automatic reminders. This way, you save time and can focus more on growing your business.
