To remind your customers the amount due that he or she needs to pay for the goods and/or services from your company, you would then need an invoice. An invoice would contain detailed information regarding each of the items that your customers bought or availed of such as the number of items, discounts, additional charges and, of course, the total amount that has to be paid. The absence of an invoice also means that you won’t get paid for your services at all.
With that said, in this article, let us take a look into invoices, learn what essential elements it should comprise of, and eventually learn how to make one of your own. We have also provided and prepared invoice examples and templates that you can easily download and edit using Google Docs format.
Elements of an Invoice
The major and basic elements of an invoice are as follows:
1. Company Details: Provide the payer and payee information. This often contains the name, the office or store address, and the contact details of your company. This must always be included in your invoice and placed at the top and bottom of the page for quick and easy identification.
2. Header: Your company might be dealing with mountains of business documents such as balance sheets, inventory lists, budget proposals, and receipt records almost on a daily basis. Minimize any confusion and limit the possible problems that may happen by simply placing header for your invoice.
3. Date and Invoice Number: Aside from the payer and payee information, you also have to include the date as to when the invoice is issued. For easy recording and tracking, include it with an invoice number. In the event that issues will arise, this element will help you in keeping track of the order and the billing itself.
4. List of Goods and Services: The list would mostly contain the name, the date, the rate, and numbers of the goods and/or services that has been provided. This does not follow any structure and you may have your own style. You may also include subsections for items that requires more details such as specific descriptions and price modifications.
5. Terms of Payment: This element highly depends to the type of industry you are currently in, your personal preference, and the degree of relationship with your client. If these terms are not met, your customers will surely face penalties or consequences and for them to be informed about these terms, make sure to clearly state it on your invoice. You may also see service invoice examples.
6. Total Amount Due: This is the important element of your invoice because this is how your customers will now how much they should be paying and this is also how you will get paid for the services you rendered. The total amount due is generated after adding other charges and applying deductions.
Ensuring clarity and accuracy in billing is not only important for your customers but it is also important for your business. As simple as an invoice can actually be an instrument that will help you in building a culture of trust among your customers. To help you out in making your own invoice that can be such instrument, here are some useful guidelines:
Ensure readability: To avoid any guessing games with your customers, do not confuse and make it difficult for them to know what they are exactly getting billed for. To ensure readability, write the goods or services you have rendered to your customers in the most comprehensive way.
Offer flexibility: One way to offer flexibility to your customers is to provide them with payment methods that they can feel safe about and can find convenience, comfort, and familiarity. Such payment methods include paying through debit, credit, and even cash on delivery, which is one of the most common payment methods nowadays. You may also see sales invoice examples.
Number your invoices: As simple as numbering your invoice will enable you to have a reference point that your customers can use to easily track their orders. Aside from that, numbering your invoices is also beneficial for you so you can easily to monitor all individual orders made.
Always provide updated contact details: In the event of customer complaints and problems regarding your products and/or services or its delayed delivery, make it easy for them to raise issues by providing contact details. Also, make sure that these contact details are updated as much as possible. You may also see plumbing invoice examples.
Secure your own copy: In the event of possible disputes and disagreements between you and your customers, having a copy of your invoice will put you at an advantage especially if they are telling otherwise. Aside from that, your invoice copy also plays an important role in accounting.
Invoices may be one of the tiny things, along with your receipts, that are often overlooked in your business operations when this is also as important as your other business documents and, as mentioned, these even play an important role in accounting. If you want to run your business right, no matter how big or small it is, you should at least know the basics on how to make one.