How to Format Your Invoices

It's time to send your client a bill. But what should you include on the invoice?

Creating an invoice that lacks clarity is unprofessional and will only make it more difficult to get paid on time. When clients open your bill, they should see key details to help them understand what it is they owe and why.

If this is your first time creating an invoice, then you may forget a few of these details.

This is one of the reasons we recommend using a quality invoicing platform, such as invoicely.

But more on that later.

Let's take a look at how you should format an invoice for your customers.

Your Business Details

The first thing your clients should see when they open your invoice is your business name and contact details. Ideally, this should go somewhere at the top, such as the right or left top corner.

Make sure to include your business name, address, phone number, and email. Then to help with branding, you can add your logo as well.

The Client's Details

Placing your client's details on the invoice lets them know the invoice is intended for them. Plus, it allows you to quickly see which invoice belongs to who when you look back into your books.

The details you should include are the first and last name of the individual responsible for the bill, their address, phone number, and email address.

You can place the client's details at the top of the invoice on the opposite side of your business details.

A Unique Invoice Number and Date

Providing each invoice with a unique number is ideal. This will allow you to reference the invoice when discussing it with the client or internally with your team members.

This will come in handy when you need to reach out to clients about a late payment. When you reference the invoice number and date, they'll be able to pull it quickly.

You'll find this especially useful when you're working with large businesses with accounting departments.

It's a good idea to place the invoice number and the date at the top of the invoice.

List of Products or Services with Descriptions

Your invoice details who the invoice is from and who it's for, now it's time to outline what it is they're paying for.

It's good to create an itemized list of the products or services you provided to them. This way, there's no question about the subtotal.

Next to each item, be sure to include the price. Itemizing the rates clarifies the subtotal, so they know precisely why it adds up to that price.

It'll also prevent any miscommunications about what you charge for each of your products and services.

The description will also make it easier for clients to know what the item is. Sometimes the names of a service or product can be ambiguous and lead to denial of receiving the item or service.

The Subtotal

This is likely the area your client will look at first so make this standout and easy to find. You'll see many companies will make the subtotal larger, bolder, and a different color than the rest of the invoice.

This is because it helps to ensure the client knows what they're supposed to pay. Again, clarity is the key to getting your invoice paid in full.

Purchase Order Number

If you were given a reference number or purchase order number, then you should include this in the invoice as well. This will ensure they can match the invoice with the purchase order so you can get paid quickly.

Forms of Payment Accepted

The goal of an invoice is to get your business paid. So it makes sense to include the forms of payment you accept.

Place a note beneath the invoice showing the credit cards and payment platforms you accept. And if you still accept cash or checks, then you can include this as well.

Now, that you know how to format your invoice, it's time to cover some best practices to ensure you're paid on time.

Use an Online Invoicing Tool

The best advice we can give businesses regarding invoices is to use an online platform. This will help you to organize your invoices better.

For one, it comes with templates you can use and save, so you don't have to make one from scratch each time. Plus, it autogenerates invoice numbers, so you don't mistakenly use the same number on two separate bills.

And what's better is that you can view your sales history in your dashboard to see how well your business is doing. Or how far behind it is in getting invoices paid on time.

You can use your dashboard to see which invoices are still have pending, so you'll know who to reach out to.

Accept Online Payments

Today's businesses are digital and expect your company to be the same. If you're using outdated payment methods, then this will only make it more difficult to get your invoices paid on time.

For example, if you're asking for wire transfers or checks, then this may delay the process. Instead, you should offer payment options that are more convenient, such as payment portals like Mollie, PayPal, and Stripe.

These platforms also allow you to accept credit card payments like Visa, Mastercard, and Amex.

Send Your Invoice ASAP

You don't want to delay the sending of your invoice. It's best to send it immediately after providing a product or service when it's still fresh in their mind.

This will allow them to pay for it right away. If you wait too long, it may confuse them. This is especially so if you're working with big companies that file hundreds of invoices monthly.

Set Up a Followup Process

There will come a time when a client "forgets" to pay on time. This is why it's essential to send payment reminders. If you're not following up with your clients, then you're inviting them to forget about your bill.

You can send a simple email a few days before the due date and a few days after the due date. But if you're too busy to remember yourself, then you can always use automated payment reminders.

This is simple to set up when you're using an online invoicing platform like invoicely.

Make a note of Who the Payor Is

When you're working with major clients, you're going to run into issues with locating the individual responsible for paying your bill. This is why it's critical to clarify who the point of contact is so you can send the bill directly to them.

Be sure to ask this before performing a service or shipping a product.

Be Clear About Payment Terms

Another way to ensure you're paid in a timely fashion is to be clear about your payment terms. For example, you should include a payment agreement as part of your onboarding process.

This should cover when the invoice will be sent and when it's due. Some companies decide to do a Net-30 (due in 30 days), while others do a Net-O (due upon receipt).

It's important to go over this with your client to see what works for both of you.  It's common for businesses to have a Net-30 for some clients and a Neto-10 for others.

Flexibility is vital to acquiring and retaining customers.

Give Clients an Incentive to Pay Early

If you're anxious about getting paid on time, then why not incentivize early payments? You can do this by offering a discount on their current invoice if they pay before the due date (or within a specific number of days).

Make sure this is visible somewhere on the invoice, such as near the subtotal.

It's good to reward your clients for their business. This may even help to boost customer loyalty.

Penalize Clients Who Pay Late

On the other end, you can penalize your customers when they don't pay you on time. But you'll need to give them a heads up about this, or it's not going to go over so well.

If you write up the payment terms agreement we discussed, then you can put it in here. You can say something like, "If invoice payment is X days late, then an X% fee will be added for each day it's late).

Then you also want to include this again on the invoice, so they're aware of the penalty if they miss the due date.

Create Your First Professional Invoice

Ready to get started with professional-looking invoices? Then we invite you to try out invoicely. There's a free version (with limitations) you can use to test out the various features.

You can create invoices using quality templates and receive payments online. It also includes automated payment reminders.

So give it a try today and let us know in the comments what you think!