How to write an invoice

An invoice is the bill that you send to a customer or client requesting payment for goods or services you have delivered or will deliver. It is different to a receipt which is an acknowledgement of payment.  

A well-designed invoice that contains all the necessary information needed is vital for ensuring you get paid on time and your business is not impacted by late payments and cash flow issues.    

The Government website has guidance on the information invoices must contain and there also other best practice steps you should take.    

Read our tips below for writing an effective invoice. 

Tips for writing an invoice 

Be professional 

Your invoice should look professional and reflect your brand so that your customer has trust and faith in your business. You could include your logo, company fonts, colours and anything else that you use for your branding.  

To design an invoice, you can do it yourself, pay an expert designer, find a template online or use accounting software such as QuickBooks and Xero which allow you to create branded invoices. 

Identify the document 

You should ensure the invoice is clearly marked with the word ‘invoice’ at the top. Distinguishing it from other documents such as bills and purchase orders will help it to stand out and could ensure that you payment terms are met and you receive your money on time. 

To keep your records organised, give each invoice a unique identification number. It can also be referenced if you need to contact a customer or if the customer needs to contact you about the payment.  

Company information 

An invoice for a business-to-business transaction should include the details of the company providing the goods or services and the company buying it. 

This includes: 

• your company name, address and contact details 
• the company name and address of the customer or client 

For limited companies, it should be the full company name as shown on the certificate of incorporation, and if you want to include the names of company directors on the invoice, all directors must be mentioned.  

If you are a sole trader, the Government says invoices should include: 

• your name and any business name being used 
• an address where any legal documents can be delivered to you if you are using a business name 

Alternatively, if you are providing services or goods to an individual, including their name and address will be appropriate. 

Purchase order number 

A customer may provide you with a purchase order number. If they do, make sure it is clearly shown on the invoice. 

Dates 

The following dates should be added to the invoice: 

• the date the goods or services were provided (known as the ‘supply date’) 
• the date the invoice was generated 

Description of the goods or services 

To avoid any confusion, the invoice must clearly outline the goods or services that are being purchased, the quantity (if appropriate) and the price. If different items are listed on the invoice, you should outline the individual price for each item.  

It is important that your customer knows exactly what they are paying for, so they do not query it and delay the payment.  

The total amount being charged 

As highlighted, if the invoice is made up of separate components, ideally this is set out as such on the invoice.  

Once complete you will then need to calculate and confirm the total amount your customer owes.  

Of course, if you have agreed a discount in advance with the customer, show how this has been subtracted from the final cost.  

Should any VAT be payable on the goods or services, confirmation of the amount payable will need to be set out on your invoice.  

Payment terms 

You should agree payment terms, such as when you expect to be paid, with your customer in advance. These details should also be included on the invoice as a reminder to the customer.  

Unless agreed otherwise, by law your customer must pay you within 30 days of getting the invoice or the goods or service if a payment date is not agreed.  

Make it easy for your customer to pay by outlining how they should do so, such as using your bank details included on the invoice.  

VAT invoices 

If you are running a business that is VAT registered, you will need to issue a VAT invoice.  

The three types of VAT invoices you can send are known as full, simplified and modified. Most VAT-registered businesses use full invoices, although modified invoices are used for sales over £250, while simplified invoices are for supplies below £250.  

As well as the information required for regular invoices as outlined above, full VAT invoices also need to include extra information such as: 

• your business’ VAT registration number 
• the tax point or time of supply if it is different the invoice date  
• the rate of VAT for each item 
• the price for each item excluding VAT 
• the quantity of each item 
• the total amount excluding VAT 
• the total amount of VAT 
• the reason for any zero rate or exemption 

The Government provides full guidance on the details to include on a VAT invoice here. 

Sending an invoice 

You can send the invoice in an email with the invoice as a non-editable PDF.  
 
In the subject line of the email, you should ideally make it clear that this is in fact an invoice you are sending. You may therefore want to include your business name along with the phrasing ‘Invoice’. Making this clear will ensure your recipient acts on this and minimise any delays in payment.  
 
Using tools provided by online accounting software companies like Xero and QuickBooks to send an invoice, formatting and speed up the payment process.  
 
You can also use accounting software to send automated reminders if you need to nudge a customer to pay. 

Get help with managing your cash flow 

Even if you issue the perfect invoice, your business can still be impacted by late payments.  

Late payments have a negative impact on cash flow. If you need help with managing your cash flow, call our team on 0800 0523 555 or use our online enquiry form. 

Date published 27 Jun 2023 | Last updated 20 Mar 2024

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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