An invoice template is a commercial document needed whenever a business transaction involves paying for goods or services. It outlines the goods or services provided, their cost, and payment terms. Sellers typically send invoices to buyers after the transaction is complete or within 14 days.
Freelancers, businesses, and service providers of all sizes rely on invoice templates to collect payments from clients.
By Format
Microsoft Word
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Google Docs
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Microsoft Excel
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By Type
What Is an Invoice?
An invoice is a request for payment for itemized goods and services sent from a seller to a buyer. Invoices are used by a person or company (offering goods or services) to tell a buyer that payment is now due.
A basic invoice should include the following details:
- Seller: person or company offering goods or services
- Buyer: person or company purchasing the goods or services
- Description: detail of each item sold or service provided
- Due Date: when payment is expected, either in 30 days or by a specific date
- Payment: whether the buyer should pay by check, money order, or other means
- Purchase Order Number: a unique identifier used to keep track of orders
If you’re having issues receiving payment from the customer, consider sending a demand for payment letter.
How Do Invoices Work?
Invoices provide those in a business relationship with a formal account of all goods and services rendered and a statement of the total sum owed. Once sent to the buyer, an invoice is an official transaction record.
Without a written invoice, the seller has no proof that a business transaction occurred. After the seller provides goods or services, the buyer cannot pay if an invoice isn’t sent. Practically speaking, invoices also serve as a professional reminder that payment is still due. Legally, they’re enforceable in court if the buyer continues not to pay or the seller provides terrible goods or services.
| Seller’s Preventable Consequences | Buyer’s Preventable Consequences |
|---|---|
Loss of Money
| Loss of Money
|
Loss of Time
| Loss of Time
|
The seller can issue the buyer a receipt once payment has been received and/or processed.
A properly sent invoice will address the following basic questions:
- Who are the seller and buyer
- What item or service is being purchased, including a description
- Where items should be delivered or service performed
- When the payment is due (i.e., 30 days from the invoice date or before a certain day)
- How the payment should be made (i.e., check or money order)
What’s the Difference Between a Purchase Order and an Invoice?
An invoice details the goods or services involved and the amount of money owed. A purchase order (PO) records a business transaction between two parties, typically large orders between a buyer and a seller.
Key differences:
| Invoice | Purchase Order |
|---|---|
| Request for payment sent from a vendor to a client | Indicates the intent for purchase to take place |
| Created by the vendor after an order is fulfilled | Issued by the buyer when large purchases are made |
| Details the confirmation of sale or service | Defines the terms of a purchase |
| Acts as a payment reminder and prevents duplicate or overpayment | Helps prevent overstocking of inventory |
How to Fill Out an Invoice
Step 1 – Company Name and Contract Details
Start by including your business name so your clients can quickly identify you. Follow up with the contact details of your business, including address, phone number, and email address.
Step 2 – Client Contact Details
Next, you’ll want to include the client’s contact details. Ensure you’re billing the correct client, whether an individual or another business. Include the client’s name, phone number, and email address.
Step 3 – Invoice Number
Use a unique invoice number so you can easily refer back to it when doing recordkeeping for your business or if you need to refer back to a specific invoice. If it’s your first invoice, you can label it as invoice one and increase the invoice number as you create more.
Step 4 – List the Goods or Services
Provide an itemized list of the goods or services provided. If you’re selling goods, you must list each specific item with the amount and the price. If it’s a service, you should document the hours worked and the hourly rate charged (alter as necessary if charging a day or project rate). Don’t forget to include the total cost.
Step 5 – Billing Information
Include details regarding your accepted payment options, such as cash, credit, or debit card, and payment terms. If you have a payment link available, include it; if not, include your account or bank information. To get paid faster, include an invoice due date at the top or bottom of the page.
Frequently Asked Questions
How to send an invoice
You can send an invoice through:
- Post
- Online invoicing
Sending an invoice by post puts it straight in the receiver’s hands, but it can be slow. You can send invoices by instant email, and the email can be saved, forwarded, and found easily. Online invoicing allows you to send a link and include paying now, an option to request payment and get paid immediately!
What is an invoice number?
An invoice number is a unique identifier systematically assigned to individual invoices. Invoice numbers ensure that invoices can be easily documented and identified, making it easier to track payments. An invoice number can be automatically generated using invoicing software or manually created.
Is an invoice a receipt?
No, an invoice is not a receipt. An invoice is issued before payment and is a request for payment for goods or services that have to be rendered. A receipt, on the other hand, is a document issued after payment or services are made.
