Knowing how to create an invoice when you’re a small business owner is an essential skill. The good news is it’s pretty easy, particularly when there are plenty of tools out there to help you streamline the process.
How to create an invoice
An invoice is a document you give to your customer or buyer to collect payment from them. It will contain their details, your company details, what goods or services they need to pay for, the amounts, whether there is VAT to pay, the date it is due, how to pay and the payment terms.
There are several ways you can create an invoice but all will include the same information. You can write it yourself in a Word document or on Google Docs or you can use a [basic invoice template](/gb/en/invoices/invoice-templates. If you want to streamline the process there are invoicing software programs that make invoicing your customers simple and painless.
With Square Invoices you can create and send professional invoices from your computer and now your phone.
A step-by-step guide on how to create an invoice
Whether you do it yourself on Word or use invoicing software, when you create your invoice follow these steps:
1. **Add a logo to your invoice**
Adding your logo and colours to your invoice not only makes it look professional it helps raise brand awareness and provides cohesion across the entire sales and marketing process.
2. **Use an invoice numbering system**
On every invoice you should include a unique number which helps both you and your customer keep track. Choose a system that works for you e.g., alphanumeric based on date, job number, customer initials etc. to avoid any confusion.
3. **Create a professional header**
As well as your logo, include name, address and contact details of your business. You should also include your customer’s details, address and contact information. If you’re a limited company and or VAT registered you should add your registration numbers too.
4. **Include dates**
Add the date the invoice is issued, date goods or services were provided and date(s) payment is due.
5. **Description of goods and services**
Provide a detailed description of goods and services and if applicable an itemised breakdown. For example, you should include the price of each unit, the quantity purchased, the sub-total, grand total and VAT if applicable. With services you should include the time spent on each service, the cost per service or hourly charge depending on how you calculate any fees.
6. **Tax and payment details to include**
You should provide details of any VAT on each item if applicable, the total excluding VAT, the % VAT charged and the final total inclusive of VAT.
You should also include:
- Date of invoice issue
- Date payment due
- Payment methods e.g., bank transfer, online payment links, cheque, cash etc.
- Late payment terms and fees
- Currencies the business accepts
- Payment terms if the invoice is issued on account or if it is split into staged payments
- Any other conditions such as early repayment discounts
- Explanatory notes
Use this section to add any additional details about the invoice or your terms such as conditions for exchange or return.
If you’re a small business owner, you need to know how to create an invoice. The good news is that it’s pretty easy, especially if you use the right tools to streamline the process.
When it comes to creating an invoice, you have options. If you’re new to invoicing, there are plenty of services that provide basic invoice templates. If you’ve been invoicing for a while and are looking to upgrade your process, there are also invoicing software programs that can make invoicing your customers simple and painless. Square Invoices, with its best invoicing app features, let’s you create and send professional invoices from your computer and now your phone. Here are five of the most popular ways to create an invoice.
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Five ways to create an invoice
If you need some help getting started with invoicing here are five of the most popular ways to create an invoice.
1. How to create an invoice in Google Docs
Google Docs provide an easy-to-share option for creating an invoice document. With easily downloadable templates you can quickly generate an invoice, or start from scratch and create your own. To use a Google Docs invoice template:
- Log in to your Google account and go to your Google Drive.
- Click the “+ New” button and scroll down to Google Docs in the drop-down menu. Click the arrow next to it and select “From a template.” This brings you to the templates page.
- Type “invoice” in the search bar on the templates page. A selection of invoice templates should appear in the results. Review the choices and select the best invoice template for your business.
- Fill out the new page with the template you selected. This includes custom entry fields with things like company name, address, phone number, email, logo, payment terms, and official payee name for receiving payments.
2. How to create an invoice with a free invoice generator
If you’re not using any of the above programs or their templates, you can use a free invoice generator. Square and a handful of accounting software services, like QuickBooks, offer professional invoice samples. To use a free invoice template from Square, follow these steps:
On the Square invoice template page, select the colour and file format for the invoice you want to create.
Enter your email address in the pop-up and the template will open in a new tab. If you don’t see the template pop up immediately, check your pop-up blocker settings for Square’s website.
Add in the entry fields for your business name, customer name, sent and due dates, the items, and the amounts.
Download your invoice and send it to your customer as an attachment.
3. How to create an invoice in Microsoft Word.
There are a variety of easy, professional-looking templates in Word. Creating invoices this way can work well, especially if you are most familiar with the software. However, it can be also a bit cumbersome. This is especially true when it comes to getting paid. Printing and sending paper invoices via snail mail can have a long turnaround time.
And even if you’re sending a Word file via email, you have to figure out the best method for customers to pay you. Usually this involves using a third-party system (like an online payments app) or having them send along a physical check. But if you still prefer to create invoices in Word, here’s how you do it:
Choose from Word’s invoice template under New in the File menu.
Look for the Invoice icon in the dialogue box (usually on the left-hand side), and select the invoice type that best fits your needs.
Set a professional header that contains your business’s contact information: business name, mailing address, phone number, email, and business logo.
Put in the client’s information (usually underneath and on the opposite side from your company’s contact info). And be sure to include the name of the business, mailing address, phone number, and email.
Include the unique invoice number, date the invoice was prepared, and a payment due date.
Indicate the payment method to set clear expectations.
Break down products or services into line item descriptions, along with charges associated with each. Calculate the total, including any applicable sales tax, delivery fees, etc. It’s helpful to put the grand total in bold font so that it clearly stands out. Then, download your invoice.
4. How to create an invoice in Microsoft Excel.
Excel offers a variety of clean, easy-to-use invoice templates, depending on your needs. However, you may run into the same logistical challenges as sending invoices via Word.
Open a new workbook from the File menu and then look for the Invoice icon in the dialogue box (usually on the left-hand side).
Choose the invoice type that best fits your needs — from a basic product invoice to invoices for specific types of services.
Fill out the custom entry fields with things like company name, address, phone number, email, logo, customer ID (if applicable), payment terms, and official payee name for receiving payments.
Be sure to include a unique invoice number, a description of products or services, and the client’s information.
5. How to create an invoice online with Square Invoices.
Square Invoices has professional, ready-to-go invoice templates that you can use to stay organised and save time. All the invoices are organised in one place (your Square Dashboard), so it’s easy to keep track of what’s been paid and what’s outstanding. Square’s online invoices are customisable, which means you can do things like apply discounts (without having to do the math on your end) and add a custom tip field (in case customers are inclined to leave you a little bonus). You can even enable invoice scheduling or recurring payments to give yourself greater flexibility when it comes to sending invoices.
Square Invoices has clear pricing — it’s only 2.5 percent per paid invoice. And invoices are easy to send — you can shoot them out directly from your mobile device or your Square Dashboard.
Creating a Square invoice on desktop
Go to Invoices in your online Square Dashboard.
Click Create Invoice.
Select a customer from your Customer Directory, or enter a new name and email address. You can enter up to nine recipients.
Add the invoice details and any applicable discounts.
When your clients receive the invoice in their email, they can pay you securely online. The money is usually transferred in your bank account in one or two business days.
Creating a Square invoice on the invoicing app
- Download the Square Invoices app on your iOS or Android device.
- Create your free Square account or sign in with your existing Square account.
- Tap the ‘+’ sign on the navigation bar and select ‘Invoice’.
- Tap ‘Add Customer’ and either select an existing customer from your Directory or tap ‘Create Customer’ to enter your customer’s name and email address.
- Tap ‘Add Item’ to add an item from your Item Library or add a custom amount.
- Add a custom message, set automatic reminders, or request a deposit if needed.
- Tap Send.
- When your clients receive the invoice in their email, they can pay you securely online. The money is usually transferred in your bank account in one or two business days.
Learn more about the Square Invoices app.