Home Business Insights & Advice Anatomy of the perfect invoice template

Anatomy of the perfect invoice template

by John Saunders
27th Aug 19 3:37 pm

A business is not really a business without cash flow. A healthy cash flow is important as well – being paid is well and good but being on time is what’s truly important.

As a business owner, you might already be using rudimentary invoices to bill your clients. These are fine but they are definitely not ideal for running a business. A well-formatted invoice is essential if you want to ensure your payments are honored on time and there is no need for the client to read between the lines.

What’s more, a well-designed professional invoice sends a good impression to your clients and customers, showing them you’re serious about business.

An invoice with basic errors or missing information can come as unprofessional, and might make your customers think twice the next time they order something from you.

To help shed light on what a perfect invoice template should look like, we’ve created this guide to help you create a professional, well-formatted invoice for your small business. You can also use premade invoice templates to make the process of creating an invoice easier. Click here for a great selection of professional invoice templates.

Components of the perfect invoice template

Invoice heading

Clearly mark the start of the template with the word ‘invoice’ to make sure your client or customer knows what they’re looking at. This is a small thing to point out, but still important to know.

Invoice number

A unique number must be attributed to each invoice for clear identification and better record-keeping for both you and your client. Keep a digital record of invoice numbers so it’s easy to keep track.

Sequential numbers work best as invoice numbers, but can be confusing if you’re using the same sequence for multiple clients. For clarity, you can uniquely identify a client using letters in the invoice number.

Your company name, address and contact

You must clearly show your company’s name, address and contact details so the client or customer knows how to contact you in case they have a question, or a dispute needs to be raised.

Make sure the contact details on the invoice are accurate so there are no problems for the client in contacting you. This is very important, so be sure to use the contact details that are active and will be used by your company in the future as well.

Client or customer’s company name and address

Except simplified VAT invoices, this is standard procedure on all invoices. If your client is diligent, they’ll ask you specifically what details you should show in the invoice for their company.

Clear description of goods and services

Make sure the goods and services your list in the invoice are the same that you delivered to your client. The name of the goods or services should not feel unfamiliar to the client, as this will only lead to confusion and quite possibly disputes.

For multiple goods and services, create separate line items and list the cost for the respective line items.

Date of supply

Also called the ‘supply date’, the date of supply is when your goods or services were issued to the client.

Date of invoice

Date of invoice is when the invoice was generated, and not when the actual goods or services were delivered (date of supply).

Total amount payable

This goes without saying but, make sure you have a sum total of all the line items (goods and services) listed in the invoice.

Payment terms

To ensure your invoice gets paid on time, it makes sense to include payment terms that clearly indicate the terms and conditions of payment that have been agreed upon by your customer.

Clearly indicate when you expect the invoice to be paid, and if there are any penalties for late payments.

Purchase order number

Purchase order number is standard for businesses that sell goods, so be sure to mention this on the invoice. Some customers may also require you to show the name of the contact person on the invoice.

How to pay the invoice

This one is really important – make sure to list multiple ways the customer can use to pay you. For example, you might want to list your bank account number, PayPal, Google Pay and so on.

Be flexible when it comes to payment methods, as it increases your chances of actually getting paid.

Invoice payment terms

To ensure smooth invoice payments, it’s your responsibility to set clear cut invoice payment terms that have been agreed upon by your customer.

Keep the payment terms as concise and clear as possible, so the customer has no problem understanding them. If they have to call you to confirm the terms then that’s one additional step that could lead to payment delays.

Also be aware that for customers part of large businesses, the respective accounts department might not be aware of the invoice payment terms agreed upon by your client. Be sure to ask your contact to make the accounts department aware of the terms and conditions.

How to send your invoice

In the preceding sections we showed you how to create the invoice template, but that’s only half the process. The next half consists of you sending your invoice to the client in a manner that ensures quick payment.

Before you send the invoice to your client, make sure you ask them for the contact details of the people in their company who’re actually in charge of making the payment. The person who makes the payment holds the actual power here, so it’s them you should be in contact with.

And while WhatsApp or Facebook Messenger might be convenient, email is still the preferred standard for submitting invoices. Remember to CC your contact person in the email in case you’re emailing the accounts department.

The invoice should be in a file format that can be opened easily. Avoid formats like Microsoft Word Docx, and choose PDFs as they can be opened on any device.

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