Invoice Details to Include Every Time
There are so many moving pieces in a business. You have multiple products and services, payroll, marketing initiatives, and so much more. These activities take up most of your time and rightly so. The minutiae of invoice details and even how to make an invoice aren’t at the top of anyone’s to-do list.
With that being said, it’s one of the most important things you do in your business because it’s how you get paid. In addition to helping you get paid, there are general legal requirements you have to adhere to when making an invoice.
Here’s a quick list of the items you should include in every invoice that’ll help you get paid faster, add context, and keep you on the right side of the law. To illustrate examples of details you need, we’ve used Freshbooks, one of the leading online invoicing products.
Billing and contact info
You work closely with clients and customers so it may seem obvious what billing invoice details to include. In reality, that’s not always the case.
Though you may be working with the CEO or C level management, those individuals may not be responsible for paying vendors. That may fall to the accounting department to make sure you understand who you’re supposed to bill and add their information in your invoices.
Conversely, you should add your own contact information. A client may have questions about a specific invoice item and needs a way to contact you directly or more quickly. In other cases, you may not handle those questions directly and there’s a specific contact person who should be informed instead of you. Whatever the case, add clear contact information so your clients can reach you.
This is an easily overlooked part that should be included in the invoice details. The reason why you want to put an invoice number is to stay organized.
It doesn’t have to be an elaborate system. The only criteria is for you and everyone involved to understand how it works. It could be as simple as 0001 up to infinity. You’ll be able to find them for tax purposes and refer to them in communications.
For example, instead of telling your client about the $1,000 invoice, you’ll be able to ask them about invoice 0024. It’s much more professional. Many invoice templates such as the ones from Freshbooks come with a place for adding the invoice number.
Terms & Conditions
Your terms and conditions should be spelled out in the customer contract and your invoice isn’t the place to make new ones. Rather, it’s where you restate important terms you’ve already established in your explicit contract with the client.
If you’re doing business without a contract then you should get that taken care of as soon as possible. When using an invoice template from a provider such as Quickbooks, then there’s a field for you to fill out your terms and conditions.
Payment details and terms
This is an important part of your invoice details. Of course, you’ll add how much people should pay because that’s the entire reason for the invoice. What many people fail to do is add clear payment terms. Again, this has already been spelled out in your contract but it doesn’t hurt to repeat them. Let your customers know the exact date the payment is due and avoid terms like net30 whenever possible.
Note: the payment terms can’t be changed with the invoice details. It should merely reflect what you’ve already agreed with the client.
Freshbooks found that adding please and thank you to your payment terms sped up payment by 2 days.
Itemized list of products and services
This part of the invoice details can cause disagreements, especially when it’s vague. Look at how the client is being billed before you itemize the invoice items.
Even though you may have delivered a specific amount of work, it won’t matter if you bill hourly. In that case, you should itemize the invoice based on the number of hours worked. If you’re billing clients based on the number of deliverables, then itemize everything you delivered during the period.
If it’s a flat rate for services like $1,000/month for marketing consulting then do your best to break down what makes up the $1,000. Be careful with this approach because complicated work or slow months will cause each item to appear more expensive.
Here’s an invoice example that shows line items based on deliverables. One of them has a further description to illustrate exactly what was done during the period in question.
Payment link or payment methods
This is one of the most important invoice details you can include. When you’ve got everything else right, all that’s left is to collect payment. Invoice templates from companies such as Zoho allow you to collect payments online at the click of a button.
If your invoice software doesn’t allow you to collect payments directly then you’ll have to add those details yourself. Use the notes section and explain how to pay in a clear and concise manner.
Do your best to avoid jargon here because any confusion will cause a delay in your payment.
Any special information requested by the client
Each business is different and some need additional information before they can pay your invoices. This may be due to legal requirements or it may want a clean paper trail.
Common items clients ask for are your tax ID number or social security number. Whatever the case, it’s important to note it in the customer file and add it to every invoice.
People who’re just learning how to make an invoice tend to skip this part as added complexity. This is a mistake because it can serve as an opportunity to do multiple things:
- Add more information relevant to your customers
- Promotions you’re running that they may have missed
- A short note appreciating their business or referencing something personal.
- Product guidelines
- General updates for all customers
This is an optional part of the invoice that helps your customers quickly identify the company sending it. If you decide to include it be sure to keep it small so it doesn’t take up too much real estate on the page.
Ideally, invoices shouldn’t extend beyond a single page. If there are many line items or detailed instructions that make it take up multiple pages, consider adding a summary of the invoice on the first page.
Here’s a full invoice example you can reference to improve your invoices.
Though a small part of your business, invoices are important. The right invoice details and presentation may be the difference between timely payment and having to chase your customers down.
A lot of your work starts in the beginning by discussing payment terms up front and letting your customers know what to expect. If there are any issues during initial discussions it may be best to skip out on that particular customer and look for greener pastures.
Get this part right and no one will be surprised by the invoice details and you’ll get paid sooner rather than later.
Now that you have an idea of what to include on an invoice, you also need to learn how to make one. Check out our post about how to make an invoice from scratch.