Invoicing 101: 9 Steps to Creating Professional Invoices

Last Updated: 

June 11, 2024

Knowing how to craft professional yet easy-to-read invoices is important for any business, small or big. Firstly, well-written invoices ensure you get paid promptly and accurately every time you complete a job, and secondly, they help you keep better track of your financial records.

Whether you’re a freelancer or a small business owner, mastering the art of invoicing is key. In this guide, we break down the basics of invoices and provide step-by-step instructions to help you create invoices that reflect your professionalism and get you paid promptly.

Team working on writing invoices
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Key Takeaways on Creating Professional Invoices

  1. Understanding Invoices: Invoices are detailed documents outlining products or services provided, agreed-upon prices, and payment terms. They serve as formal requests for payment, facilitating transparency, clear expectations, transaction recording, and tax compliance.
  2. Importance of Professional Invoices: Professional invoices go beyond securing prompt payments; they contribute to better client relationships, efficient record-keeping, and compliance with tax regulations.
  3. Use Invoice Templates: Utilise free Excel invoice templates for a structured and customisable format, ensuring consistency and reducing the risk of errors in your invoicing system.
  4. Clear Header: Create a clear and impactful header with your business name, contact information, and logo (if applicable), making a positive first impression on clients.
  5. Contact Information and Client Details: Include your full name or business name, address, phone number, and email. Provide detailed client information to avoid delivery issues.
  6. Outline Services Clearly: Specify services with clarity, including quantities, rates, and additional charges to prevent misunderstandings and disputes.
  7. Assign Unique Invoice Numbers: Assign unique invoice numbers for each transaction to streamline bookkeeping, facilitate tracking, and add a professional touch to your invoicing.
  8. Set Clear Terms of Payment: Explicitly state payment terms, including due date, acceptable payment methods, and penalties for late payments, establishing expectations and trust.

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What Are Invoices and How Are They Used?

Before you jump to our step-by-step guide to creating professional invoices, we recommend taking a moment (this will take 5 minutes, tops!) to read this part so you can grasp the fundamentals of invoicing. Why? Because the first step to creating professional invoices is understanding exactly what they are and what they are used for.

In simplest terms, an invoice is a detailed document or bill that outlines the products or services you provided, the agreed-upon price for said products or services, and the terms of payment. In essence, it’s a formal request for payment from your customer or client.

While simple documents, invoices are not just pieces of paper, real or digital, they’re important tools for running a successful business. They help you:

  • Be transparent in your work,
  • Set clear expectations,
  • Record your transactions,
  • Ensure tax compliance.

As you can see, there’s a good reason why everyone who is serious about their business and customer relationships should try their best to always send professional invoices. After all, they matter not just for obvious reasons – getting paid fast and accurately – but also for building better client relationships, record-keeping, and tax compliance.

Additionally, an invoice approval workflow is a critical process within financial operations that ensures invoices are validated and authorised before payment is made. This workflow typically involves multiple stages of reviews and approvals to confirm that the invoice details match the purchase order, the goods or services have been received, and the costs align with contractual agreements.

Automating this process can significantly improve efficiency, reduce errors, and help maintain strong vendor relationships by ensuring timely payments. In businesses where expenditure and vendor management are crucial, having a robust invoice approval workflow helps maintain budgetary control and financial integrity.

Step-by-Step Guide to Creating Professional Invoices

With the basics out of the way, let’s move on to the practical side of creating professional invoices.

Professional invoices are detailed, structured bills that businesses use to request payment for services or products. They are well-organised, featuring clear formatting and company branding, which reinforces identity and professionalism. 

Each invoice includes comprehensive details like item descriptions, prices, taxes, and totals, along with specified payment terms like due dates and accepted payment methods. These documents also comply with legal standards, featuring necessary tax and licensing information and sequential numbering for tracking. 

Professional invoices not only prompt timely payments but also aid in financial record-keeping and enhance professional relationships through transparent financial communications. Their use is crucial in maintaining budgetary control and meeting accounting and tax reporting requirements.

Use Invoice Templates

To make the process of creating invoices as easy as possible every time you complete a job, consider using free Excel invoice templates. They’re customisable and provide a structured format, making it easy to input your information and create polished invoices every time. This not only saves time but also reduces the risk of errors, helping you maintain a professional invoicing system.

Start with a Clear Header

As in life, so in business, first impressions matter. And since the first thing your client sees when they open your invoice is the header, start with that. Make sure it’s large (it should use up to 15% of the page height) and it includes your business name, contact information, and logo if you have one.

Include Your Contact Information and Client Details

Make sure your invoice includes your full name or your business name, address, phone number, and email address. This ensures that your client knows exactly who the invoice is from.

Next, provide your client's information. Include their name or business name, address, and any other relevant contact details. Double-check this information to avoid any delivery mishaps.

Outline Your Services Clearly

When listing the services you’ve provided, it’s best to be specific and clear. Depending on the service or product, you can include quantities, rates, and any additional charges to avoid misunderstandings and disputes later on.

Assign Unique Invoice Numbers

Assign a unique invoice number to each transaction to help with organisation and tracking. This practice streamlines your bookkeeping process and allows for easy reference in case of any inquiries or discrepancies. Sequential numbering also adds a professional touch to your invoicing system.

Set Clear Terms of Payment

To avoid any misunderstandings with your client, make sure you explicitly state your payment terms on the invoice. Specify the due date, acceptable payment methods, and any penalties for late payments. This sets expectations and encourages timely payments while building trust between you and your clients.

Amount Due and Payment Instructions

Sum up the costs and present the total amount due prominently. Then, to make the payment process as easy and fast as possible for your clients, include detailed instructions on how they can send payment, whether it's through bank transfer, credit card, or an online payment platform.

Add a Personal Touch or Additional Information

While maintaining professionalism is crucial, adding a personal touch can set you apart, so consider including a brief, friendly thank-you to your client. Here, you can also include any additional information, such as details on how they can contact you with any questions.

Review Before Sending

Before hitting the send button, take a moment to proofread your invoice for typos and errors, ensure all details are accurate, and confirm that you haven’t missed anything crucial.

Remember, a polished, error-free document demonstrates attention to detail and adds credibility to your business.

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