How to Create an Invoice, Plus 5 Sources for Free Templates

Billie Anne Grigg

Billie Anne Grigg

Billie Anne Grigg has been a bookkeeper since before the turn of the century (yes, this one). She is a QuickBooks Online ProAdvisor, Xero Certified Advisor, LivePlan Expert Advisor, FreshBooks Certified Beancounter, and a Mastery Level Certified Profit First Professional. Billie Anne started Pocket Protector Bookkeeping in 2012 to provide an excellent virtual bookkeeping and managerial accounting solution for small businesses that cannot yet justify employing a full-time, in-house bookkeeping staff.
Billie Anne Grigg

Business owners have a lot on their mind, so until the task becomes relevant, they’re not exactly spending free time wondering how to create an invoice. And, even then, for a small business owner using accounting or billing software, the purpose and importance of writing an invoice might not be clear. After all, isn’t creating an invoice just a formality?

Actually, writing an invoice, structuring it properly, and including the correct information can have a dramatic impact on your business’s cash flow. (Now you’re listening, eh?) Whether you use an accounting or billing program, a formatted spreadsheet, or a Word document when creating an invoice, you want to make sure the correct components are included.

What is the purpose of an invoice, and why is it such an important business accounting document? How do you create an invoice perfectly for your business to make sure you get paid as quickly as possible? Here’s what you need to learn about this important document and its impact on your business.

Why Writing an Invoice Is Actually Important and Purposeful

Turns out that creating an invoice isn’t just an archaic formality. An invoice is used to convey lots of vital pieces of info to your customer or client:

  • Products or services the customer has purchased from you in detail
  • How much they owe you for these products or services
  • When you expect to receive payment(!!!!)
  • The methods of payment you accept
  • Where to send their payment

See why we say it can have a huge impact on your bottom line if you don’t invoice correctly?

So, if you provide products or services to other businesses, these businesses will very likely require that you create an invoice and send it over to them before they’ll pay you. Just like you might from them.

Writing an invoice is the first step in the accounts receivable process. If you’re using an accounting or billing software to create your invoices, creating the invoice will automatically post the amount of the sale to the correct general ledger accounts. You can then track the total amount each customer owes to you to make sure you receive all your payments.

For your customer, your invoice is the first step in their accounts payable process. Your invoice is a bill to them, and they’ll use the information on your invoice to validate the bill and start the payment process.

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How to Create an Invoice and What to Include

What should you include when you’re writing an invoice? At a minimum, your invoices should include the following information:

The basics:

  • Your business name (or your name if you’re a freelancer)
  • Your mailing address for payment
  • Contact information for any invoice questions

Accounts payable:

  • Accounts payable contact information for your customer or client, including:
    • Customer’s or client’s business name
    • Accounts payable contact name
    • Billing address for the accounts payable contact

Your specifics:

  • An invoice number (This is especially important if you have multiple open invoices for a customer at any given time. An invoice number can help you apply your customers’ payments as intended and serve as a reference number for your customer.)
  • Date of the invoice
  • Payment terms
  • Listing of products or services sold and the price for each product or service
  • Subtotal
  • Any discounts, advance payments, or deposits
  • Total amount due
  • Payment methods accepted

Believe it or not, the structure of your invoice has a direct bearing on how quickly you get paid. Certain customers—especially large companies, government entities, and project-based businesses like construction contractors—require specific information on invoices in order to process them.

Some of this information may include:

  • Purchase order number
  • Contract or project number
  • Dates of service covered by the invoice
  • Taxpayer ID number

Make sure you understand your customers’ billing requirements before submitting an invoice so that you don’t risk having your invoice rejected. Often, incorrect invoices are not addressed immediately by the client, and once they are you addressed, you might have to reset the clock on the payment terms—further hampering your cash flow.

How to Write an Invoice to Expedite Payment

You can include certain things on your invoices to expedite receipt of your payment:

  • Note a due date or exact payment terms. Many businesses default to “Due upon receipt” as their payment terms. While intuitively “Due upon receipt” payment terms might seem to be the way to get paid the fastest, giving a specific amount of time to pay often results in faster payment.
  • Include any pertinent backup information. If your customer submitted a purchase order, or if you have an engagement letter or contract, it never hurts to include a copy of this with your invoice. This will save your customer’s accounts payable department from having to locate the documentation on their end, which means your invoice will be entered for payment quicker.
  • Accept electronic payments and include a payment link. Many small business owners do not want to incur the costs associated with accepting credit card or other electronic payments, but this is tripping over dollars to save a few pennies. Invoices that contain a payment link are, on average, paid in half the time it takes to collect payment when a payment link is not included on the invoice. Make it easy for your customers to pay you, and they will pay you faster!
  • Invoice on a regular basis. It is easier to collect payment if you invoice soon after the completion of the sale or service. Invoicing on a regular basis ensures that you’re always billing your customers or clients before too much time has passed. Also, if you work with a particular client on an ongoing basis, sending regular invoices helps reduce “sticker shock,” which may occur if your customer receives a large invoice for several orders or months of service at one time.

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5 Sources for Free Invoice Templates to Help You Write Invoices

If you use billing or accounting software, you likely have a number of invoice templates to choose from right within the software. Often, you can adjust these templates to include specific information.

If you adjust an existing template, take the time to make sure all the information boxes align and that all details fit within the boxes. Include your logo as well. The end goal is to produce a professional-looking invoice that is easy for your customer or client to read and understand.

If you aren’t yet using a billing or accounting software package, you’ve got other options. You can buy blank invoice forms at your local office supply store, but these often require you to write invoices by hand and can give your business an unprofessional appearance.

Instead of handwriting invoices on forms, give one of these free invoice templates a try:

  • FreshBooks Free Invoice Creator: FreshBooks is a cloud-based billing, expense, and time-tracking software. If you only need to create an invoice, though, you can use their free invoice creator feature to create an invoice, email it to your client, and save a PDF copy for your records. 
  • QuickBooks Free Invoice Creator: Similar to FreshBooks’ Invoice Creator, this free invoice generator helps you create a professional-looking invoice in just three steps.
  • FreshBooks Invoice Template Gallery: Also available courtesy of FreshBooks is this free invoice template gallery. You can download dozens of invoice templates in PDF, Word, or Excel format. Then, print them and send ’em off to your clients.
  • Microsoft Office Templates: If you own Microsoft Office or subscribe to Office 365, you have a ton of templates already available right inside your Word or Excel program. This site gives you even more options, which you can download, open, and edit using your Office software.

Writing an Invoice That Puts Your Best Foot Forward

Taking the time to write an invoice to perfection is not something a new business owner gives much thought to, sure. But doing so can help make sure that you get paid quickly. And this really matters the world over, since it has a direct impact on your business’ cash flow. That’s critical at all points in your business, but especially so during the beginning stages.

Including the right information in the format that your customers or clients require also helps establish your expertise in their field. Writing an invoice formatted for products when you provide services, or failing to include critical information often required by your target customers can give the impression you’re not familiar with their industry.

As business owners, we always want to put our best foot forward. Writing the perfect invoice is one easy way to establish your cred and get off to a great start.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
Billie Anne Grigg

Billie Anne Grigg

Billie Anne Grigg has been a bookkeeper since before the turn of the century (yes, this one). She is a QuickBooks Online ProAdvisor, Xero Certified Advisor, LivePlan Expert Advisor, FreshBooks Certified Beancounter, and a Mastery Level Certified Profit First Professional. Billie Anne started Pocket Protector Bookkeeping in 2012 to provide an excellent virtual bookkeeping and managerial accounting solution for small businesses that cannot yet justify employing a full-time, in-house bookkeeping staff.
Billie Anne Grigg

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