Invoices Everything You Need to Know

By QuickBooks Canada Team

2 min read

An invoice, while not technically a binding legal document, is one of the most important documents you will create when you’re self-employed. It directly affects when you get paid and on what terms those payments are made. Below are eight essential elements you should include to create a professional and effective invoice so that you get paid on time.

Company Information

Be sure to include the details of the person or company you are invoicing. Whether you completed a project for a friend or a large organization, remember to include their legal name, business address, business phone number, email address, and fax number (if applicable) on the invoice. Include your contact details as well, so that the person or company knows where to mail the check or how to reach you with questions. If you accept PayPal, credit card payments, or other forms of online payments, make sure to clearly display those payment options so that your clients know how to pay you.

Header

This may seem blindingly obvious, but be sure to label your document as an invoice in the header. This way, you minimize any confusion about what the document is, especially if it’s part of a pile of otherwise indistinguishable papers.

Date, Invoice Number and Unique Identifier

Along with contact information, you’ll want to include the date on which the invoice is issued and an invoice number or another unique identifier. You can structure your invoice number or ID number based on any system you choose, whether it’s a simple file number, a unique billing code or a date-based purchase order number. If you are sending the invoice to a large organization, check to see if there are any unique company details they need included such as an internal purchase order (PO) number or a billing code. For many larger organizations, PO numbers and/or billing codes are the only way they can expediently pay an invoice. Details like these can mean the difference between getting paid on time and getting paid late.

List of Goods and Services

This section of the invoice can be as detailed or generic as you like. The most important parts of the listing include:

  • Name of the good or service provided
  • Date the good or service was provided
  • Rate for the good or service provided
  • Quantity of the good or service provided

You may want to consider adding sub-sections for each item that includes price modifications, item descriptions or other information as needed.

Terms

Terms of payment are incredibly important on an invoice. Standard payment terms will vary based on your industry, your preference and, perhaps most importantly, your relationship with the client. It’s also important to make mention of the penalties if these terms are not met. This could include a late fee or an additional percentage of the total bill.

Itemized Fees

If there are any taxes, handling fees or other charges that need to be levied, each of these should be listed as a separate line item.

Total Amount Due

While it may seem trivial, it’s worth mentioning:  Make sure that the total amount due is prominently displayed on the invoice.

While there are no legal guidelines for an invoice, including the elements listed above will help ensure your invoice is handled correctly and paid promptly.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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