How to Create and Submit an Invoice for Your Business
A comprehensive guide to creating, submitting, and managing invoices to streamline your business's payment collection.
An invoice is a formal request for payment from a seller to a buyer for goods or services. It outlines transaction details, providing a clear record for both parties. Accurate invoicing is fundamental for maintaining transparent financial records for your business and clients.
Key Information for Your Invoice
Preparing an invoice requires specific details to ensure clarity and compliance. Your business name, address, phone number, and email address should be clearly displayed at the top, along with your client’s full business name and contact information.
A unique invoice number is necessary for tracking purposes. The date the invoice is issued and the payment due date, typically ranging from 15 to 30 days from the issue date, must also be included. Stating these dates helps manage payment expectations and timelines.
The core of the invoice involves an itemized list of goods or services. Each entry should include a detailed description of the item or service, the quantity, and the unit price. This allows the client to understand exactly what they are being charged for and verifies the scope of work or products delivered.
Following the itemized list, calculate a subtotal of all goods and services before applying any applicable taxes. Sales tax is calculated based on the subtotal and the prevailing tax rates for the transaction’s jurisdiction. State the total amount due, which includes the subtotal plus any taxes, and list the accepted payment methods, such as bank transfer, credit card, or check.
Creating Your Invoice
After compiling the necessary information, assemble it into a professional invoice document. Utilizing pre-made templates is a common and efficient approach, available in word processing or spreadsheet programs. These templates provide a structured layout, helping ensure all required fields are present and organized.
Dedicated invoicing software or online invoicing services offer another effective solution for creating invoices. These platforms often feature customizable templates, automated calculations, and client management tools, streamlining the invoice generation process. Such tools can also help maintain consistency in branding and presentation across all your billing documents.
The goal is to produce an invoice that is clear, readable, and professional in appearance. Ensure that fonts are legible, information is logically arranged, and there is sufficient white space to prevent clutter. A well-designed invoice reflects positively on your business and can facilitate a smoother payment process for your clients.
Methods for Invoice Submission
After completing your invoice, deliver it to your client. Emailing the invoice as a PDF attachment is a widely used and efficient approach. When sending via email, ensure the subject line is clear, such as “Invoice [Your Business Name] – [Invoice Number],” and the email body includes a brief, professional message summarizing the attached invoice.
For some clients, especially larger organizations, submission through their dedicated online vendor portals may be required. This involves logging into the client’s system and uploading the invoice document or manually inputting the invoice details into specific fields. Adhering to the client’s portal instructions is important to ensure successful and timely processing.
For clients who prefer or require physical documentation, sending the invoice via physical mail remains an option. This method requires printing the invoice, placing it in a professional envelope, and ensuring proper postage. Including a return address and clearly addressing the envelope to the appropriate contact person or department helps ensure the invoice reaches its intended recipient.
After Submitting Your Invoice
Once an invoice has been submitted, it is prudent to establish a process for tracking its status. Confirming receipt, especially for email or online portal submissions, can offer peace of mind that the invoice has reached its destination. While not always possible, a simple follow-up email or check within an online portal can verify delivery.
Maintaining meticulous records of all submitted invoices is a fundamental practice for financial management. This includes keeping copies of the invoices, noting the submission date, and tracking payment status in your accounting system. Comprehensive record-keeping is vital for tax purposes, reconciling accounts, and resolving any potential payment discrepancies that may arise.
If payment is not received by the due date, a gentle follow-up communication may be necessary. This typically involves sending a polite reminder email or making a phone call a few days after the payment due date has passed. The aim of this communication is to inquire about the payment status and offer any assistance if there are questions regarding the invoice.