Invoices

• What is an invoice?
• An invoice sample with mandatory and optional fields
• Types of invoices
• Invoicing tools

• What is an invoice?

  An invoice is an official document that a company sends to its customer when it sells products or offers services. The invoice indicates exactly what product has been sold, or what service has been offered and for how much. It can be seen as a request for payment and includes payment details so that the customer can pay the company. A good invoice needs to be precise and free from any unnecessary additions.

• An invoice sample with mandatory and optional fields:

  
  

  There are the requirements for a standard, well-formed invoice:

  HEADING – “INVOICE”

  The invoice heading should clearly state that it is an invoice as it allows the client to instantly see what they are receiving and how they can handle it.

  INVOICE DETAILS

  These are the details/sections a proper invoice should have:

  • Invoice number: It helps in tracking the invoice as well as keeping your financial records in order.
  • Issue date: This is the date that the invoice was created and sent.
  • Description of products or services provided: The description should be explicitly stated and clearly written. It should also be as brief as possible. There is no need for long drawn out service/product detailing.
  • Details of quantities of products: Fill out the correct quantity of all products supplied.
  • Unit prices: Specify the amounts clearly. To minimise the risk of differences due to rounding, it is recommended that the prices should be rounded to two decimals for accounting purposes.
  • Details of any discounts given: Specify the precise discount given and which products or services had been discounted.
  • Subtotal price: It is the total amount of all services or goods offered minus VAT/GST. This is also the amount you apply the VAT/GST rates to.
  • The VAT/GST rate/rates applied: VAT/GST varies from product to product. Ensure that you're up to date with the current VAT/GST rates.
  • The total amount of VAT/GST charged: Calculate the total value of the VAT/GST rates and specify it clearly.
  • The total amount of invoice: This is the sum total of all the products or services offered plus VAT/GST rates. This is the definitive amount the client will pay. Make sure that it is correct in order to avoid any delayed payments.
  • Company name: This must be your correct registered business name.
  • Company business address: This is the official address of your company.
  • Company registration number: This is the number assigned to your company when it was registered.
  • Company TAX number: This is necessary for taxation purposes. It may be omitted if your company is not VAT/GST payer.
  • Client’s company name: This is your client's registered business name.
  • Client’s company address: This is the client company's registered address.
  • Client’s company registration number: Ensure that you fill in the correct business registration number.
  • Client TAX number: For taxation purposes, your client’s TAX number must be on the invoice. It may be omitted if the company is not VAT/GST payer.
  • Currency: This is a necessary addition to the invoice to ensure no financially related confusion ensues.

  OPTIONAL FIELDS

  These sections or details can be added or left out depending on your preference:

  • Due date: This is the date the total payment is due.
  • Late fee: This is an additional fee for situations where the client does not pay by the due date.
  • Payment details: These are your company’s bank details or any other payment option you prefer. For example, Bank name, IBAN, SWIFT/BIC or PayPal or cash.
  • Email address: This is your official company email address.
  • Phone number: This should be the official phone number of your business.
  • Payment reference number: This is for tracking the payment.
  • Customer number: The numbers that are assigned to track business activities with your customers.

  Good to know: How to assign invoice numbers

• Types of invoices:

  • VAT/GST Invoice: standard invoice issued by a VAT/GST payer
  • Invoice for VAT/GST non-payer: standard invoice issued by a VAT/GST non-payer company
  • Proforma invoice: simple request for payment
  • Credit note: refunding a customer
  • Recurring invoice: automatic invoicing a subscribing customer
  • Price quote: price offer of a fixed price for specific goods or services
  • Debit note: requesting a refund from a vendor

• Invoicing tools:

  • Simple invoice software
  • 38 Free invoice templates - Word, Excel, PDF, Google docs/sheets
  • PDF invoice generator [free]

Additional Invoicing Tips:

Whenever you send an invoice notification email to a customer, it is advisable to add a simple, “thank you” at the end. This shows politeness and professional friendliness. Just these two simple words makes an impression that you care about your client and that you would like to have a continuous and long term business relationship with them, which will definitely help with the growth of your business.

Ensure that every detail on the invoice is correct before you send it to your customer. This will prevent any hassle on your customer’s part, as they would not want to waste time having to contact your company and requesting any changes to your invoices. It is not seen as very professional if you have any mistakes on your invoices and could even lead to frayed relationships with your clients which could impact and hinder your business. In addition, having the wrong information on an invoice may lead to delayed payments for your goods or services.