Even if you’re using business accounting software or a billing platform, it’s important for every business owner to understand how to create an invoice. After all, creating an invoice, structuring it properly, and including the correct information can have a dramatic impact on your business’s cash flow and the ease of your operations.
Luckily, there are a variety of ways you can create an invoice—from writing it out by hand to using a free template—and we’re here to help.
In this guide, we’ll review what should be included in an invoice, how to create one using different templates, as well as tips for expediting payments from your customers.
In this guide:
What to Include in an Invoice
Although using a free template, as we’ll discuss below, will be the fastest and easiest way to create an invoice, it’s nevertheless important to understand what should be included in this document.
Of course, there will certainly be some differences from invoice to invoice, business to business, however, at a minimum, your invoices should include the following information (shown in the image example below):
- Your business name (or your name if you’re a sole proprietor)
- Your mailing address for payment
- Contact information for any invoice questions
- 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
- 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 customer’s 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
- Any early payment discounts, advance payments, or deposits
- Total amount due
- Payment methods accepted
Ultimately, and as we’ll discuss in greater detail below, when you’re drafting an invoice, it’s not only important to include all of the right elements, but the structure itself is also significant—as the structure of your invoice has a direct bearing on how quickly you get paid.
This being said, certain customers—especially large companies, government entities, and project-based businesses like construction contractors—require specific information on invoices in order to process them. You want to make sure you know these.
Some of this information may include:
- Purchase order number
- Contract or project number
- Dates of service covered by the invoice
- Taxpayer ID number
You’ll want to make sure you understand your customers’ billing requirements before creating and 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 addressed, you might have to reset the clock on the payment terms—further hampering your cash flow.
Therefore, you’ll want to make sure that everything is covered in your initial invoice—that way, you don’t have to worry about delayed or late payments.
How to Create an Invoice With Free Templates
If you use billing or accounting software, you likely have a number of invoice templates to choose from right within the software. While you can create an invoice from scratch, there are so many simple and comprehensive templates out there that there really isn’t a good reason not to use one.
Plus, if you’re questioning what to include or how to structure your invoice, a template will give you everything you need to know. Moreover, in most cases, you can adjust these templates to include specific information, so they cover any needs you might have.
This being said, if you adjust an existing template, you’ll want to take the time to make sure all the information boxes align and that all details fit within the boxes. You’ll want to 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 have 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. Creating an invoice online is your best bet.
To this end, if you find you have more complex or frequent invoicing needs, you might even invest in dedicated invoicing software that can streamline your processes and allow for the greatest level of customization.
To start off, however, you might choose to utilize any of these free template options to learn how to create an invoice:
How to Create an Invoice With FreshBooks
Although FreshBooks is a full-service accounting software platform, it’s also well-known for its robust invoicing capabilities. If you sign up for a subscription for FreshBooks, you’ll have access to their invoice software—however, they also offer two options to create an invoice for free.
First, you can use the FreshBooks Free Invoice Creator. Even without a subscription, you can use this tool to create an invoice by:
- Clicking “create your invoice” on the Free Invoice Creator website.
- Choosing a template.
- Customizing the template with your business’s brand.
- Adding the invoice details including your contact information, customer information, payment terms, etc.
- Clicking “email invoice” or “download as PDF.”
With this tool, you can either email the invoice directly to your customer or download it to print and mail physically. Of course, even if you have email it directly from the invoice creator, you’ll want to save a PDF copy for your records.
In addition to this method for creating an invoice using FreshBooks, you also have the option to simply browse their template gallery, find a template you want, download it to your computer, and customize it from there. In this case, you can also print and mail the invoice or email it to your clients. FreshBooks offers different free templates for Microsoft Word, Excel, as well as PDFs and Google Docs.
How to Create Invoice With QuickBooks
Similar to FreshBooks’ Invoice Creator, this free invoice generator from QuickBooks will show you everything you need to know how to create an invoice and helps you create a professional-looking invoice in just four steps:
- Enter your client’s information.
- Enter your business information.
- Fill in the information about the products or services provided, including costs and due date of the invoice.
- Customize with your logo and choose a font type, font size, and color.
Then, you’ll easily be able to preview your invoice and download it to send it to your customer.
Of course, this free invoice generator is very simple and does not allow for many customizations. This being said, however, if you have a subscription to a QuickBooks accounting product, you’ll be able to access a library of more advanced templates.
Follow our guide for more information on how to invoice in QuickBooks.
How to Create an Invoice With Microsoft Word
If you own Microsoft Office or subscribe to Office 365, you have a ton of free invoice templates already available right inside your Word or Excel program.
Creating an invoice in Microsoft Word, for example, is simple—and follows many of the same steps that we’ve discussed thus far with QuickBooks and FreshBooks:
- Choose a Microsoft Word invoice template.
- Add the relevant invoice information.
- Customize to reflect your business brand.
- Save as a PDF and send to your customer.
If you don’t need some of the more detailed customization options that come from accounting software like FreshBooks or QuickBooks, using Word to learn how to create an invoice might be the easiest solution. Plus, if you already have access to Microsoft Word, you don’t have to worry about paying for or learning a new system.
Follow our guide for more information on how to make an invoice in Word.
How to Create an Invoice With Microsoft Excel
Once again, if you already have Microsoft Office, using Excel to create an invoice can be a quick and easy option. In fact, Microsoft offers more invoice templates for Excel than for Word—as Excel’s spreadsheet structure is well-suited for making your invoice calculations.
This being said, in order to create an invoice with Excel, you simply have to:
- Choose and download your template.
- Fill in all of your invoice details.
- Customize the invoice as needed.
- Save and send the invoice to your customer.
With Microsoft Excel, you might find slightly more complex and detailed templates, which may be useful if you’re looking for a step-up from Word. Additionally, if you’re using Excel for other facets of your business accounting, you may find it helpful to keep all of your documents in the same file type.
Follow our guide for more detailed steps on how to create an invoice in Excel.
How to Create an Invoice With Google Docs or Sheets
Finally, if you prefer Google Docs to Microsoft Word—or you’d rather create a free Gmail account as opposed to paying for a subscription to Microsoft Office, you can also use the tools within G-suite to learn how to create an invoice.
In this case, you have a few different options:
- First, you can choose between Google Docs and Google Sheets
- Then, once you’ve chosen your preferred Google product, you can open up the program and search the template gallery for invoice templates.
- After you’ve found the template you want, you can click on it to open a new document or spreadsheet.
- Next, you’ll add all of the necessary information and customize the invoice as you desire.
- Once everything is complete, you’ll be able to download and send the invoice to your customer.
Of course, with G-suite, you can also do a Google search of “free Google Docs invoice templates” or “free Google Sheets invoice templates” and use any pre-created templates that work for you.
Tips for Creating Invoices to Expedite Customer Payments
At this point, you should have a better sense of how to create an invoice using a variety of free templates, as well as writing one by hand, if necessary. This being said, however, as we mentioned above, it’s not only important to understand how to create an invoice, but how to create one to help increase your chances of getting paid early or on time.
Here are examples of certain things on your invoices that can help expedite receipt of your payment:
- Note a due date or exact payment terms: Many businesses default to “Due upon receipt” as their payment terms. Although 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. Therefore, you’ll want to include specific invoice payment terms, as well as a due date, to avoid any confusion.
- 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 cards or other electronic payments, but this is tripping over dollars to save a few pennies. Offering online payments can get you paid 17 days faster than the alternative. That’s just the average, too. It might be much faster for you. So, you see, if you make it easier for your customers to pay you, they will pay you faster. Wondering how to accept these types of payments online? See our guide to B2B payments here.
- Invoice on a regular basis: It’s 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.
- Watch your words: What you say matters when you create an invoice. For example, a simple “please” or “thank you” can increase your chances of getting paid on time by 5%. It pays to be polite and offers up a positive impression of your business brand. Be sure to think about the little things as you’re writing and completing the invoice.
The Bottom Line
At the end of the day, learning how to create an invoice is a pretty manageable process—especially when you use a free template or invoice-, accounting- or billing software.
Ultimately, as you continue to run your business, invoicing will become second nature and you won’t have any trouble remembering what elements to include and what tricks can help you get paid on-time.
To this end, however, there might come a time where invoicing using Excel or Google Docs is no longer sufficient for your business. In this case, you’ll want to consider investing in a free invoice software, like Zoho Invoice, or even a paid platform, like QuickBooks or FreshBooks, that allows you to bundle your accounting and invoicing all in one system.