You’re no stranger to an invoice, whether it arrives or goes out by email or post. But what’s the best way to make one?
Taking legal action on late payments is harder if your original invoice has errors.
Avoid this hassle – and get the payments you’re owed – with a well-made invoice that leaves no room for disagreement.
Legal and general
The following information MUST be on all invoices:
- The word ‘invoice’, written/printed clearly and legibly
- Your company’s legal trading name, status (i.e. limited company), and full address
- Your name, if you operate as a sole trader
- The date the invoice was issued, and your payment terms
- Your company’s VAT number (if you’re VAT registered)
- The specific VAT on the amount due (both in pounds and percent, as above)
That first point above seems too obvious to include, but don’t overlook it. If your invoice isn’t specifically labelled as such, it’s not legally binding.
If you’re running a limited company, the company name you put on the invoice must match the name on your certificate of incorporation.
We also advise you include these details as best practice:
- Invoice number (for both you and the customer to reference)
- Order number (as above)
- Full and correct customer information (name, address, contact details)
- Itemisation of each product, with quantities and ‘per item’ prices
The invoice number should immediately follow on from the previous invoice you issued.
Ticking off these points on your invoice will make things easier if you need to start debt collection procedures.
If both you and your customer are VAT-registered, you’re legally obligated to issue an invoice for all sales. On top of that, you must use a specific VAT invoice.
Receipts are different, as they’re only classed as acknowledgement of payment received.
For supplier invoices and dealings with other businesses, you may need to give more details. As well as the invoice date, you should include the actual date you provided the good(s) or service(s).
If you’ve been paid in advance, you must issue a VAT invoice within 30 days of the payment. Be sure to add the line ‘paid in full’ – or ‘paid with thanks’, or similar.
Keeping things simple
Regular customers and suppliers may know what to do – but highlight your preferred payment method. Include BACS details for a bank transfer or Direct Debit. This gives late payers fewer excuses.
We also suggest making the payment deadline large/bold and easily readable. If there’s a dispute, you can show that your terms were clear on the invoice.
For more help creating the ideal invoice, use our online guide and example invoice template.