How to Create an Invoice: A Step-by-Step Guide

With businesses going fully digital, invoicing also needs to be done online. Now that many people are buying online, you need to be familiar with creating invoices for your business as fast as possible. Fortunately, many online tools can help you generate an invoice for your products or services. Even some payment services like Paykassma can help you with your invoice.

However, as a business owner just starting, you should be familiar with the various steps when it comes to how to create an e-invoice. In that case, we have put together this guide to help you create your first invoice, and in no time, many more. So, make sure you read through each section so that you do not miss anything.

What Is an Invoice?

In simple terms, an invoice is a document required for you to get payment. So, this means that when you complete a job, provide a service, or make a sale, and it is time for the customer to pay, the invoice lists out the services or goods sold. With that, the customer can then proceed to pay the required amount as stipulated on the invoice.

An invoice is a commercial document that must meet different requirements before being considered a legal invoice. In addition, it is a pivotal part of the sales process, and a must, especially when you are in the business of providing services or selling goods of any kind. Aside from helping you get paid promptly, invoices improve record-keeping, help maintain the business’s financial health, and accurately file tax returns.

How to Write an Invoice

It does not matter if this is your first sale or your hundredth, every invoice you create has to meet a specific set of requirements. With many tools like Microsoft Word, Excel, Google Docs, etc. now available, you do not need to go through the tedious process of using paper and pen. With innovative tools built into these tools, you also do not have to worry about doing the calculations yourself, which reduces the chances of error in the invoice.

Additionally, you can use invoicing tools for your invoice design with a few clicks. With that, you can get it all done in a few minutes. Some tools even come with templates that you can customise for your business. That way, you can keep using the invoice template for future transactions. However, before you can use any of these tools, you need to be familiar with the requirements your invoice needs to meet, which we have listed below.

1. The name and contact of your business.
2. The name and contact of the customer.
3. A unique invoice number that goes with your invoice number sequence.
4. The invoice issue date.
5. Description of the service or product you are selling.
6. The costs of each service or product.
7. VAT details, if applicable.
8. Date the goods were sold, or the service was provided.
9. The total amount.

These requirements are standard for most countries. However, you should check with country laws if there are additional requirements your invoice needs to meet. Or, you can use any invoicing application localised to your country.

Types of Invoices

Invoices come in different kinds, and we have highlighted some of the most popular types of invoices in this section.

Standard Invoice

From the name, you can tell that this refers to simple invoices, a legal document that comes with every sale. Every business issues standard invoices to customers after a service is rendered or a product is sold.

VAT Invoice

A VAT invoice is also similar to a standard invoice, but it includes VAT details for two VAT-registered businesses transacting with each other. So, this invoice is strictly applicable to B2B transactions and not to sales to individual customers.

Proforma Invoice

Another type of invoice is a proforma invoice, a draft invoice often used as a placeholder for a sale before the complete details of the sale are finalised. In that case, this type of invoice can be referred to as a temporary/dummy invoice until the transaction is completed.

Electronic Invoice

An electronic invoice, or e-invoice, is simply an invoice you create and send digitally. So, in simple terms, this is a standard invoice created, completed, and sent online.

Amending Invoice

Since we are humans, mistakes are bound to happen from time to time. For that reason, an amending invoice helps correct mistakes made on the previous invoice.

Aside from these standard invoices, other types include simplified invoices, full invoices, and modified invoices.

Invoice Creating Tips

Before you start creating invoices for various business transactions, here are some closing tips for you to keep in mind.

• Make sure your invoices are organised so that you can easily keep track of every one of them.
• Ensure that every new invoice is reviewed before you send it out to your customer. That way, you reduce the chances of errors occurring in the invoice.
• You should ensure that your invoices are marked.
• Consider adding notes such as a friendly thank-you message to your invoices. Although this is not a requirement, it can help your brand by simply showing courtesy.

Bottom Line

Knowing what an invoice is and how to create one is essential, especially for a business owner or a service provider. That way, you can get paid for services you render or products you sell. In addition to that, you can easily track your business transactions with each invoice you’ve issued over time whenever questions arise. So, we believe that with the help of this guide, you can start creating invoices for your business. If you want a payment service to help you process payments from clients, you can check out Paykassma.