A sales invoice is a document sent by a business to a purchaser or customer, which illustrates a detailed list of the items or services they received, and the payment owed. The invoice helps to establish an obligation on the part of the purchaser to pay. Invoices are an essential part of any business, especially for the accounting and bookkeeping side of operations.
Learn the ten details that should be included in your small business’s invoices below and how to invoice a customer correctly.
There are ten essential details that should always be included on a business invoice. These include:
Check out this how-to guide on making an invoice in QuickBooks, Excel, and Word to ensure your business invoices are professional and appropriately detailed.
The invoice ID is a unique number given to each invoice for clear identification. It is best to give each invoice number an individual and sequential number per customer or purchaser at the beginning of every calendar or tax year. This unique number will help you stay organized, as well as make bookkeeping easier when it comes to filing your taxes.
The business name and address is one of the most important things to include on your invoice. The business’s information shows who you are and lets the customer know how to reach you if they have any questions or concerns about the invoice. The contact details that should be included on your invoice include:
As with your contact information, your invoice must include all the same details of the recipients. The invoice address refers to the physical home or business premise where the seller sends the bill, invoice, or receipt.
The address is usually identical to the one appearing on the customer’s credit card or check account. It is the shipping address where goods are delivered. The invoice also identifies the address and name of the seller.
Customers always want to know what they are paying for. So when it comes to writing descriptions, try not to make them as vague as possible. Inform your customer precisely what they have received from you. It is essential to be as specific as possible in this section.
Include a breakdown of the products or services you provided and the corresponding charges. Suppose a customer has to contact you to clarify these details. In that case, it may reflect poorly on your business.
After the description of each line item, make sure to include the quantity (the number of parts and/or the number of hours worked for each product or service) and the corresponding cost (per unit or per hour). Finally, include the total charge for each line item.
Generally, all Canadian invoices should inform customers of the price of the goods or services they’re purchasing and the applicable tax they’re paying for those items. The amount of Harmonized Sale Tax (HST), Goods and Services Tax (GST), and Provincial Sales Tax (PST) attached to your business’s invoice will depend on where you do your business.
When you are charging GST/HST on your goods or services, follow the Canada Revenue Agency’s requirements for the information that must be included on your invoices.
If you have an itemized list of items for each product or service you have offered, each one should be marked with an individual cost. The amount due will be the sum total of all the goods and services listed on the invoice in which your customer owes you.
This is one of the most common payment terms found on invoices for small businesses and freelancers. Net D refers to the date that payment is due from the invoice date that a customer receives.
Most often, businesses will use a net 30 payment length to ensure that customers pay their invoice amount within 30 days of receiving the invoice. However, you can decide what timespan your business will provide your customers to pay. Various companies will offer their customers net 10, 15, 20, 30, 60, or 90-day to settle their invoices.
Net D is essential to include on an invoice, as it makes it crystal clear when you must be paid by. Clearly stating the net 30 also prevents any confusion resulting in late payments.
Payment terms should portray a clear description of the guidelines your customers must follow to complete the service or product transaction. It is critical that you include the payment due date, any incentives for paying early, such as a 2% reduction in the total cost due if you so wish, and the terms for late payments, including applicable fees for going over the net due date.
These details will help you send follow-ups or overdue notices to your clients if they fail to make their payments. Depending on the amount, you may also offer to break the payments into instalments for your clients.
To streamline the payment process, add a Pay Now button directly into every invoice (which can include sales terms and payment methods), allowing them to pay by credit card or Apply Pay from the document. This makes sending and receiving payment as seamless as possible, ensuring you get paid on time, and your customer obtains an easy payment method for a successful transaction all around.
Remember that it’s for you to decide how quickly you want to get paid. Set your terms and make sure your customers keep to them! Your aim is to make the customers’ lives as easy as possible, ensuring they will come back and buy from you again.
Creating a customized and branded invoice is easy when you use QuickBooks Online. Generate consistent invoices for your clients and receive your payments faster with internal payment options available through this quality accounting software’s invoicing feature. Why not try it free today?
Call Sales: 1-888-829-8589
