The content of this article is provided for informational purposes only. You should always obtain independent business, tax, financial, and legal advice before making any business decision.
Invoices aren’t just vital records of transactions – they’re also essential for ensuring businesses are paid on time and preventing any payment disputes or misunderstandings.
That said, if you’re a new business owner who’s unsure of how to create an invoice, you’ve come to the right place. From branding to invoice payment terms, here’s what you need to know about what to include in an invoice.
Every invoice should include:
Here’s how businesses typically organize the elements in an invoice:
Adding your business logo, brand colors, and brand fonts to your invoice not only instantly reinforces a sense of professionalism and legitimacy but also builds brand awareness among your buyers.
Prominently placing your business name, address, and contact information (email address, phone number, website) in the header helps buyers know who the invoice is from and saves them time should they need help.
Plus, by having your buyer’s business name, contact person, contact information, and business tax ID (if applicable) upfront, you can streamline your recordkeeping.
An invoice number is a unique identifier issued to each invoice that your business issues, making them easier to track and manage.
To start assigning invoice numbers, you’ll first need to decide on a format. For example, you might use a sequential numbering system (e.g., 001, 002, 003), a date-based system (e.g., 2023-05-01), or a combination (e.g., 2023-05-01-001).
Additionally, consider assigning a prefix, such as “INV” or “IN” to your invoice numbers to distinguish them from other types of documents or transactions.
The invoice date is when you issued the invoice, which serves as a reference point for both you and your buyer when tracking the payment due date.
Providing a clear list of products or services and their associated cost ensures that you and your buyer are on the same page regarding the scope of the transaction. Your buyer can also use the invoice to account for all items and services.
From the invoice, your buyer should be able to immediately see the following:
Nobody wants to be paid late – that’s why your invoices should contain clear payment terms, including the following:
Although well-designed invoices are typically straightforward, it is generally a safe practice to add explanatory notes on anything unusual within the invoice.
You can also consider including any terms and conditions that may be relevant, such as your return policy and how that may impact the invoice payment terms.
Now that you’ve designed your invoice, it’s time to send it out.
The most common methods of sending an invoice include:
To learn more about the pros and cons of each option, check out this guide.
Ready to create your first invoice? We’ve got good news: There’s no need to build one from scratch manually – use our free invoice generator to get started. Pay only when you get paid.
Alternatively, explore these invoice templates that you can easily customize:
But the work doesn’t stop once you send your first invoice. To track your invoices, accounts receivable, and accounts payable, you’ll want to use an online invoice tracker – or, even better, PayPal’s invoicing solutions, which makes invoicing (and getting paid!) fast and simple.
In partnership with three expert business owners, the PayPal Bootcamp includes practical checklists and a short video loaded with tips to help take your business to the next level.
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