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How to Write an Invoice

Omkar Phatak Jul 28, 2020
Creating a proper invoice is an essential business practice, that every accountant should know about. The essentials have been presented in this story.
Of the many business practices that you need to know about, an important one is the creation of an invoice, for any of the services provided to a customer. It is the most important practice with respect to accounting too, as it helps you to keep track of the work that your business did in a month or a year.
An invoice is another name for a bill delivered to a customer, who may have purchased a product from a business or used some of their services. It is a detailed and itemized listing of each bit of service provided or product sold. It has the business seal and signature of the business proprietor and is sent to the customer, at the end of every business transaction.
It is necessary that one knows invoice creation, as without a proper billing document, you cannot expect to get paid. It is an important legal document which serves as proof of services that have been provided. In case of defaulted payment, an invoice or billing can be used as evidence, if the business sues a customer for non-payment.

The Essentials of Writing One

Clear formatting and systematic presentation of information are the hallmarks of a good invoice.

Include Business Name and Contact Information

First and foremost, the customer needs to know who has sent the invoice. That's why, you need to include the name of your business, along with contact details, which include office address and phone number. It is preferable that you include this as part of the letterhead and it's printed in bold letters. Let the name of your firm have the highest font size and let it be placed, right at the top.

Date and Reference Number

Secondly, on the left hand side, you must specify the date on which this invoice was created. Also essential is a reference number that will help you, when filing a copy of it in your records. Start with any number but see to it that future invoices are generated with successive reference numbers.

Include Tax Details

Any tax-related details of the product or service, which you have charged, need to be included. See to it that the information and cost involved are accurately provided.

Include Itemized Details of Products and Services Offered

Provide a brief, yet thorough description of all the services rendered or products sold to the customer. Make a table and provide the cost of every item.

Provide a Total Due Amount

Provide a sum total of the amount that is due to be paid, in bold letters at the bottom. Let this be displayed as the sum of all the itemized costs, specified in the table above.

Specify Payment Terms

If you have any special terms and conditions of payment, include them at the bottom. Specify the date before which the bill is expected to be paid. Check out some invoice templates, to know how it's done.
A properly created invoice, with all the details included, gives a professional feel to the customers. As mentioned before, it is a good accounting practice which will help you calculate your monthly or yearly revenue, generated through sales and services, quite easily.