How to format an invoice - an easy guide for small business owners
An invoice is more than just a bill. It's a reflection of your company, your services, and your leadership. And as a small business owner, it's important to use an invoice format that communicates the details of each sale for your valued clients.
If you're not sure how to format an invoice, we've got you covered. In this guide, we'll help you understand why invoice formats are so important for the world of business and show you how to create an invoice template that you can use for your company.
Why your invoice format matters
An invoice is a request for payment, and for all intents and purposes, it functions like a bill. But unlike a standard bill, an invoice contains considerably more detail about the transaction and the parties involved.
It's important, therefore, to choose a template that reflects your brand and the unique identity of your small business, one that helps you to look professional when you're billing clients.
But the right invoice format also makes the payment process crystal clear. Among other things, an invoice lets your client know:
- How much to pay you
- How to pay you
- When to pay you
- What happens if they miss the deadline
This is why your invoice format needs to be clear and direct so that your clients are encouraged to submit payment promptly.
Getting paid on time is good for your business. When you get paid quickly, you'll have better access to cash flow, which you can use to cover expenses, pay your employees, and invest in expansion projects to help grow your business.
Try using a free invoice template
You don't have to create invoices from scratch. You can streamline your invoicing process by using invoice templates. Invoice2go, a Bill.com company, offer several free invoice templates to choose from. You can even customize them to meet your needs before downloading them as a Microsoft Word doc, Excel sheet, or PDF document.
Using an invoice template can save you time, since the basic invoice format will remain constant for every invoice you send. Only details such as the products, invoice number, and date will need to be changed.
This also lets you delegate this responsibility to other employees, who can be easily trained to fill in the details of an invoice and send them to your customers.
Types of specialty invoice formats
Some business owners might need a specific type of invoice format. For example, you might send invoices in the following formats:
- Recurring invoices (when billing customers for regular services)
- Prepayment invoices (for accepting money before rendering goods)
- Time-based invoices (when charging for billable hours)
In most cases, you can simply adapt your standard invoice to include such details as billable hours or options for prepayment under the terms you set with your customers. But if you find yourself doing business like this more regularly, you might want to create multiple templates to reflect each type of business transaction you might be invoicing for.
How to create your own invoice template
It's easy to create your own invoice template. You'll simply need to know what information to include in your final invoice format. We'll walk you through the process so you can create professional invoices that reflect the character of your small business.
You can either start by using Google Docs, Microsoft Word, or another word processing software to generate a template. Then, you can reuse this document for future invoices. Simply create the relevant sections and fill in the new details when you create a new invoice.
How to create your own invoice template
- Insert your company logo
First, you'll want to customize your invoice by inserting your corporate logo at the very top, usually centered over the entire document. Don't have a logo? You should at least include your business name, offsetting this information by using a larger, bolder, recognizable font.
The purpose is simple — including your logo helps clients to identify your business out of all of the invoices the client receives. It also increases brand recognition while you conduct business. Plus, it helps your invoices to look more official.
- Include your contact details
Next, you'll include your contact details, usually to the left side of the page. It's okay to repeat your business name here. You'll also include items such as:
- Your physical address
- Your email address
- A phone number
- The web address of your business
This section is simply used to let your customers know how to get in touch with you if they have any questions about the transaction or the information listed on the invoice.
With that being said, you might want to make a note of your preferred method of contact so it's even easier for a customer to reach you.
- List your client's contact information
Below your name and contact info, you'll include the same basic details for your client. If you had a specific point of contact, such as their billing department, you can specify that here by writing "ATTN:" and including the relevant name or department.
If you're not sure what format to use for the contact info for your client, just try to mirror the format they use on their own business correspondence or website. Their name and contact info can simply fall under your own or you can put it at the far right of the page.
- Label your invoice
This might sound obvious, but your customers need to know what sort of document they're looking at. Simply labeling your document as an "invoice" in nice bold letters will let recipients know, at a glance, what kind of document they've received.
- Include a unique invoice number
Every invoice you send should include its own invoice number. Invoice numbers are useful for internal accounting purposes and can help you keep track of the invoices you send. This can also help you to monitor unpaid or outstanding invoices.
If your company uses purchase orders, you can match the invoice number to the original purchase order number to maintain a clear record of every transaction you make.
Your clients also rely on invoice numbers for their own internal record-keeping. They may even expect you to provide this data to help their own purchasing or accounting department complete the sale. By providing this number, you might ensure a long-term relationship with the client.
Not sure what number to start with? You can simply label your first invoice "001," your next "002" and so on. This will let you complete nearly 1,000 invoices before changing your numbering system. If you anticipate high volume, you can simply start by numbering with extra zeroes (e.g., "0001").
- Record the invoice date
Each invoice should also include the invoice date, which refers to the date at which the invoice was created and sent. This is important, as it will be later used to establish the due date for the invoice, the deadline by which you expect to have your invoice paid by your customer.
- Include a description of goods and services
This is the main section of the invoice. Here, you'll list all of the goods that were sold or the services you provided for your customers. When you're creating a template, this section will naturally be left blank, though you'll want to give yourself plenty of space to include as many details as necessary.
This is where your invoice format might have to be adapted to your specific industry. This section should include information like:
- Products sold
- Item or part numbers
- Description of the service you provided
- Price of each item or service
You'll want to be concise, but the more details you can include, the better your customers will be able to understand what they're being billed for.
If you can't fit it all on one page, that's okay. You can include a brief summary on the main page of your invoice and provide a lengthier list of details on subsequent pages.
- Record the total cost
After listing the cost of each of your products or services, you can provide a subtotal. At this point, you can add taxes, as well as any applicable discount codes that may have been part of the original contract.
Once you do the math, you'll include the grand total, the amount that the customer owes you. This should also be clearly labeled and perhaps written in bold font to distinguish this number from any of the costs listed in the previous section.
- Specify your payment details
Below the grand total, you'll want to include as much information as possible about payment terms and options. This means you'll want to list your preferred payment methods, such as what credit cards you accept.
Additionally, you'll want to clearly spell out your payment terms. This means informing the customer about payment deadlines and any potential charges for late fees. This is why it was important to include a date on your invoice, as this will help create the deadline by which the invoice must be paid. Many businesses simply specify "30 days after receipt," though you can attach any reasonable deadline you prefer.
- Thank your customer
Don't forget to include a quick note to express your appreciation to your customer for doing business with you. This adds a personal touch to your invoicing format and can go a long way to strengthening customer relationships.
Maintaining a good rapport with your clients can even make them more willing to rely on your company's services in the future, so adding a quick thank you could be good for business!
Tips for creating professional invoices
There are some tricks you can use to make sure your invoice adheres to a professional invoice format. These methods can even save you time, making your invoicing process simple, fast, and effective.
Send invoices electronically
Once you've finalized your invoice format, you can create digital documents that you can send to your clients electronically. If you're sending invoices through email, you should always make sure to include the name of your company and even the word "invoice" in the subject line to alert recipients of the document they're receiving.
Remember, if you use one of the sample invoice templates from a site like Invoice2go, you can download the form as a PDF and send it as an email attachment. The catch, however, is that some clients may not receive email attachments, which can result in late or delayed payments.
Use an invoice generator
You might want to simply use an online invoice generator like the one offered by Invoice2go. Simply fill out the prompts and you can create an invoice in a matter of minutes.
Once you fill out the form, you can double-check your final copy by hitting the "preview button." Once you're done, simply download the document as a PDF or send it to your clients electronically.
You can even use it for international clients by selecting the currency from the tab at the right of the screen, making it easier than ever to create your own invoice.
Use invoice software
It's always easy to use online invoicing software. For example, the invoicing software offered by Invoice2go lets you create professional-looking invoices and send them directly to your clients using your computer or mobile device. We even provide a mobile app that lets you quickly create and send an invoice.
This not only makes invoice formatting a breeze, but it also helps you get paid faster, since your clients can respond to their invoice online. They'll even receive automated payment reminders, so they never have to miss a payment.
Invoice faster with Invoice2go
Invoice2go provides digital solutions to help you better manage your business finances. Get paid faster by using our cutting-edge invoicing tools. We offer free invoice templates that you can download and use, and our digital platform can improve your financial processes, too.