What should an invoice include?

Knowing how to put together an invoice is essential for a business owner. Without the ability to send out invoices, you’ll not be able to receive payment for your products and services. As such, you may want to consider learning what to include in an invoice. 

This article will list all the important sections to put in your business invoices. We’ll go into detail about how these sections should look, but in short, you need to include:

• Essential invoice details
• Your company details
• Itemised list
• Relevant dates
• Amount of money due
• Payment terms and methods
• How Countingup can make invoicing easy

A lot goes into making an invoice, but there are a couple of details that specifically make a document an official invoice. These are an invoice number and the term ‘invoice’. 

Although it might seem obvious, a surprising number of businesses will forget to label their invoices as invoices. It might get lost among the number of other necessary details, or the business isn’t aware of its importance. 

Regardless, it’s vital that you clearly label your invoices as such. Without the word ‘invoice’ clearly stated, your document could be mistaken for a receipt, quote, or credit note. 

The other essential detail for an invoice is an invoice number. It’s a legal requirement that your invoices include a ‘unique, identifying number’. There isn’t a set system for invoice numbers, so the easiest thing to do is use sequential numbering: the first is invoice number 0001, then invoice number 0002, and so on.

If you send out a lot of invoices, you might even include letters as well. The important thing is that you have an easy-to-understand system so that you can find old invoices in your records later on.

You must include your contact information on each invoice. There’s no limit to the number of contact options you can offer, but the minimum is that you list your company name, business address, and at least one way of getting in touch with your company. This is in case there are any issues or disputes concerning the transaction.

Examples of contact information you could include are:

• Telephone number (landline or mobile)
• Email address
• Social media handles (Twitter/Facebook/Instagram)
• Your website (but only if customers can use it to send you messages)

Not using an itemised list is a very common invoice mistake. Many businesses will simply send an invoice with the total price for the transaction, even if the transaction includes multiple items or services.

To create an itemised list, all you need to do is include each individual product or service that the customer needs to pay for, as well as their individual prices. Doing so helps the customer understand what they’re buying and helps you record which of your services are more popular. 

For an invoice, the relevant dates you need to include are the date of supply and the date of invoice. The date of supply is whichever day you supply the customer the goods you’re invoicing them for. 

The date of the invoice is the date that you generate the invoice. This might be the same as the supply date or a few days later, but try not to leave too much of a gap before sending the invoice. Also, keep in mind that the invoice date is not the day the customer receives the invoice but the day you create it. 

As well as the individual price of each product and service you provide, remember to clearly state the total amount the customer owes. Setting your prices and deciding how much to charge in your invoices is an important task, as it hugely affects your business income. If your invoices don’t include an explicit total, all the effort you put into setting your prices will go to waste.

Your payment terms refer to the period of time within which you would like the customer to pay off their invoice. Your payment methods are the methods through which a customer can pay off their invoice. You might have multiple payment methods, but try to indicate which one you prefer so that you don’t have payments coming in from many different sources. 

Here are some different payment methods you may accept:

• Card payments
• Electronic bank transfer
• Cheques
• Paypal

You might also accept cash payments, but this may require a lot of manual bookkeeping. With digital payments, the system you use will automatically record the amount and date of payment. 

It’s important to explain the payment terms, as it’s difficult to chase up late payments without being pushy. If you’re too aggressive when requesting payment, it can damage your relationship with that customer. Similarly, making payment methods obvious avoids customer confusion regarding how to pay.

Countingup is the business current account with built-in accounting software that allows you to manage all your financial data in one place. Over 40,000 business owners trust Countingup to make bookkeeping simple. Countingup has a range of handy features, but its invoicing system is particularly helpful. 

Some of our customers have asked us how a receipt is different to an invoice.

With the Countingup app, you can create an unlimited number of invoices for free. You can also customise them according to your business needs — for instance, you can change the due date for payment — and even add your business logo for a polished, professional appearance.

The app automatically numbers your invoices too. Countingup’s invoice system is a great way to avoid mistakes, as you can duplicate invoices that you know are accurate. Since a mistake in your invoice can mean your company loses out on money, having a way of ensuring accurate invoices is essential.

Receiving payments for invoices is easier with Countingup, too. You’ll receive a notification when a customer pays their invoice. The app will automatically match the payment with the invoice. Invoice matching helps keep your records organised, helps confirm that clients are sending you the correct amounts. 

Find out more here.