How to Create a Professional Invoice

What is an Invoice?

An invoice is a commercial document issued by a seller to a buyer that indicates the products, quantities, and agreed-upon prices for products or services provided. It serves as a formal request for payment and an important record for both parties.

Essential Invoice Elements

• Invoice Number: A unique identifier for tracking and record-keeping
• Company Information: Your business name, address, and contact details
• Client Information: The buyer's name and billing address
• Invoice Date: When the invoice was created
• Due Date: Payment deadline
• Line Items: Detailed list of products or services with quantities and prices
• Subtotal, Taxes, and Total: Clear breakdown of all charges
• Payment Terms: Expected payment timeline and methods accepted

Invoice Best Practices

• Send invoices promptly after delivering products or services
• Use clear, professional language and formatting
• Include detailed descriptions of services or products
• Specify payment methods accepted (bank transfer, credit card, etc.)
• Set clear payment terms (Net 30, Net 15, etc.)
• Keep copies of all invoices for tax and accounting purposes
• Follow up on overdue invoices professionally
• Consider offering early payment discounts to improve cash flow

Common Payment Terms Explained

• Due on Receipt: Payment expected immediately
• Net 15: Payment due within 15 days
• Net 30: Payment due within 30 days (most common)
• Net 60: Payment due within 60 days
• Net 90: Payment due within 90 days

Tax Considerations

Depending on your location and the nature of your business, you may need to charge sales tax, VAT, or GST/HST. Always consult with a tax professional to ensure compliance with local tax regulations. This tool allows you to add tax percentages per line item for maximum flexibility.