How to Invoice a Company: A Step-by-Step Process

An invoice is a commercial document issued by a seller to a buyer, serving as a formal request for payment for goods or services provided. It also creates a detailed record of the transaction for both parties. This documentation facilitates accurate accounting, financial reconciliation, and tax compliance. Accurate invoicing maintains healthy cash flow, reinforces business credibility, and simplifies tax reporting.

Essential Invoice Information

A professional invoice requires specific details to ensure clarity, accuracy, and legal compliance. The invoice must clearly display your full legal business name, complete address, and contact information (phone number, email). Including a website enhances professionalism.

Client information is equally important, requiring their legal company or individual name, billing address, and a relevant contact person. Each invoice requires a unique, sequential identification number for tracking and record-keeping. The invoice issue date and payment due date must also be displayed to set clear expectations.

An itemized list of goods or services forms the core of the invoice, describing each item, quantity (e.g., hours, units), unit price, and total amount per line item. A financial summary must present a subtotal, applicable taxes (e.g., sales tax), and the grand total due. Businesses should verify local tax regulations for correct application.

Clear payment terms and instructions ensure timely receipt of funds. This section should state accepted payment methods, such as bank transfers, credit card payments, checks, or online payment portals. Providing specific instructions, like bank account details or an online payment gateway link, streamlines the payment process. Payment terms like “Net 30” indicate payment is due 30 days from the invoice date, helping manage expectations. An optional notes section can include project details, a thank you, or special instructions.

Generating Your Invoice Document

Once essential information is gathered, compile it into a professional invoice document. One common method uses manual templates available in word processing (e.g., Microsoft Word, Google Docs) or spreadsheet programs (e.g., Microsoft Excel, Google Sheets). These templates provide a structured layout for inputting details, ensuring consistent presentation. Many basic templates are also found online, offering a starting point for customization.

For infrequent invoicing, free online invoice generators offer a quick solution. These web-based tools allow users to input details into a form, automatically generating a professional PDF invoice for download. They are useful for those not requiring extensive features or recurring billing.

Dedicated invoicing software, such as QuickBooks, FreshBooks, or Wave, offers a robust approach to invoice creation. These platforms allow businesses to set up client profiles and maintain libraries of frequently used items, expediting invoice generation. Such software often includes automated calculation features for subtotals and taxes, reducing manual errors. These systems also provide branding options, allowing customization with logos and color schemes, enhancing credibility.

Submitting and Managing Invoices

After an invoice is prepared, submit and manage it to ensure timely payment. Email is a prevalent method for sending invoices, requiring a clear subject line like “Invoice [Your Company Name] – [Invoice Number].” The email body should be professional, detailing the attached invoice and specifying the payment due date. Attaching the invoice as a PDF is standard practice, preserving formatting and preventing alterations.

Sending a physical invoice via mail may be necessary for clients preferring traditional correspondence or lacking digital access. When mailing an invoice, ensure professional presentation, often on company letterhead, and always include a return address. Dedicated invoicing software streamlines submission by allowing direct sending via email or secure client portals, often automating tracking.

Post-submission, diligent invoice management is important for maintaining healthy cash flow and accurate financial records. Tracking each invoice’s status (sent date, amount due, due date, payment status) is fundamental. Maintaining accurate digital or physical copies of sent invoices is crucial for accounting, tax compliance, and resolving payment disputes. For overdue payments, a polite follow-up is appropriate, typically a reminder email reiterating the outstanding amount and due date.