Expert answers: How do I write an invoice for my small business?

Readers’ Question: I’ve just completed a job for my first client and I need to invoice them but I don’t know where to start. How do I write an invoice and what should I include?

All invoices you generate will send a message about your business to your customers, and can quite often be the only formal documentation you send them.

Expert answer: Provided by GoSimpleTax to help you pinpoint the important factors when it comes to creating invoices.

What do I include on my invoice?

When sending out invoices, it’s important to include the following:

• Date of the invoice
• A unique reference number
• Your company logo
• Your company name, address and contact information
• The name and address of the customer you’re invoicing
• A clear description of what you’re charging them for
• If you are VAT registered you must break down and show the net amount charged, the VAT and the gross amount along with your VAT number
• The total amount the customer owes
• Payment terms, for example, on delivery or 30 days of the date of invoice

Limited company – If you’re a limited company, you must include the full company name as it appears on your certificate of incorporation. If you decide to put the names of your directors on your invoices you must include the names of all directors at the company.

When sending out invoices, ensure the amount charged is correct. If you send out inaccurate invoices, your customers will be unimpressed.

To help follow the steps below:

1. Track your hours worked and the cost of materials used, the agreed rate or if selling goods, the correct quantity sold.
2. If you provided a quote makes sure your invoice matches the quote, or if the invoice value is different to the quote put a clear note on the invoice explaining how the difference arose, for example, higher costs of material or extra work requested by the customer. This could help prevent any possible disputes.
3. Send the invoice as soon as possible, the longer you leave the longer you will wait for payment.

Invoice regularly

Sending invoices is something you should do regularly as this is the core of every business. Your cash flow depends on the efficiency of how you invoice if you wait until the end of the month to send your invoices you cashflow will suffer.

The sooner you get into the habit of sending invoices as soon as possible the better. Having good accounting software will help you do this, you may even be able to automate most of the invoicing process which should save you time and money.

Decided on a delivery system

Wherever possible send your invoices by email. Delivery is immediate, free of cost and you can easily resend if needed. Most bookkeeping software will manage this process for you, easing some of the burdens. Some bookkeeping systems also integrate with payment providers such as Worldpay so your customers can pay you via a link on the invoice. Convenient for both you and the customer.

You can of course still send paper invoices but these need to printed and delivered.

If you have a question about your small business that you need answering you can submit your question to the experts here.

More on limited company invoices and limited company accountants.