How to Send an Invoice on PayPal

how to send an invoice on paypal

For most business owners, administrative and account paperwork probably doesn’t get you fired up in the morning. But these essential accounting tasks, such as creating and sending invoices, are vital to your business’s operations.

Sending and tracking your invoices ensures that any pending payments are issued in a timely fashion, after all. And we don’t need to explain to you how important it is for your business to receive payments on time. 

If you use PayPal’s small business solutions to send and receive payments for your business, you may be wondering how to send an invoice on PayPal. In this article we’ll explain the steps you’ll need to take to accomplish this accounting task.

Let’s get started.

Perks of PayPal Invoicing

Paper invoices are a thing of the past and online invoice services are making it easy to collect payment. When invoicing through PayPal, you can email professional, customized invoices to your customers. Your customers then have the option to pay with a credit card, debit card, PayPal, or PayPal credit.

Invoicing through PayPal also has some other perks packaged into their service:

  • Review invoice status (check when the invoice has been received, opened, and paid).
  • Add branding to your invoice with your own logo.
  • Generate invoices on the go with the PayPal Business mobile app.
  • It’s free to sign up.

How to Send an Invoice on PayPal

In just four steps, you can create and customize your own PayPal invoices.

Step 1: Access the PayPal Invoice Template

  1. Log into PayPal on your computer.
  2. At the top, click the “Send & Request” link.
  3. On the right side of your screen, click “Send an Invoice.”
  4. You will be directed to the invoice creation page.

how to send an invoice on paypalStep 2: Assign Your PayPal Invoice

how to send an invoice on paypal

In this section, you’ll want to pay attention to the following items:

  • Your business information: You’ll provide your name, company, logo, and email address. You’ll also have the option to include your address, phone number, and tax ID number.
  • Who to bill: Here, you’ll enter the recipient’s email address. Your invoice will be emailed to the recipient for them to complete payment. 
  • Invoice information: Enter the invoice number and the invoice date. The invoice date should be the day you send out the invoice, not when you generate it.
  • Due date: PayPal will default this to “due on receipt” but you can change the deadline to a date of your choice.

Step 3: Itemize the Deliverables

how to send an invoice on paypal

  • Choose the billing method: Depending on the transaction, you can invoice by quantity (i.e. two products), hours (i.e. consulting services), or by amount only. 
  • Item name: Clearly define the product or service you provided.
  • Pricing: Enter the product quantity x price (for price method) or hours worked x rate (for hourly method).
  • Tax: Add your state sales taxes in this section.
  • Add another line item: If you sold additional products or services, you can add a new line for each one.
  • Discount: If you offered a discount to your customer, you can enter the percentage value to update the total amount due.
  • Shipping: If you charged shipping for a physical product, you can add that amount to the total amount due.
  • Terms and conditions: Enter the payment terms in this section, such as late payment penalties.

Step 4: Preview and Send Your Sample Invoice

After completing the necessary fields, you can press the “Preview” button to review your invoice. If you caught an error, you can click the “Edit” button to correct it.

Here is what a PayPal invoice template looks like:

how to send an invoice on paypal

Once you confirm the information is correct, click the “Send” button and PayPal will email the invoice to the recipient. 

Congratulations! You now know how to send an invoice on PayPal.

How to Send an Invoice on the PayPal App

PayPal makes invoicing convenient because you can create invoices on the go. Here’s how to send an invoice through the PayPal app:

  1. Download the PayPal Business App (it will be different from the standard PayPal app).
  2. Open the app on your mobile device.
  3. Tap the menu button (≡).
  4. Tap the (+) icon.
  5. Complete all applicable fields (these will be the same as the above PayPal invoice fields).
  6. Click the “Next” button.
  7. Tap “Send invoice.”

how to send an invoice on paypalA sample invoice on the PayPal app. Source: Apple App Store.

Similar to invoicing through the PayPal website, the mobile app will also email your invoice to the recipient.

How to Share a PayPal Invoice Link Yourself

There might be instances where your client doesn’t receive your invoice. Whether it was buried in their spam folder or they just forgot about it, it’s still your responsibility to stay proactive so you don’t wind up with late payments. One way to ensure your customers receive your invoice is to message or email them with the direct link to your PayPal invoice. Here’s how you can do that:

1. Log into PayPal.
2. At the top of the screen, click “Send & Request.”
3. Click “Send an Invoice.”
4. Find your invoice number and invoice date.
5. Under “Action,” select “Share Link” from the drop-down menu.

how to send an invoice on paypal

6. Copy the link. You can then send this link directly to your customer via email, text, or another communication method.

This extra step ensures that your customer receives the invoice both from PayPal and directly from you to increase your chances of receiving payment on time.

Receiving Payment Through PayPal

After you send the invoice, your customer receives an email with a button to view it. They will then be provided the option to pay the amount due through PayPal, debit card, or credit card.

You should receive an email notification when the invoice is paid. Log into your PayPal account to review your updated balance (while it should only take a few minutes to receive payment, PayPal advises it may take a few business days for the payment to process).

After confirming that the payment has been received, you can link your bank account to transfer it. PayPal offers two options for transferring your funds: instant transfer or standard transfer. For standard transfers, processing time may take three to five business days. Alternatively, you can pay a fee to receive the funds within 30 minutes through an instant transfer. 

Alternatively, you can pay a small fee to receive a check through the mail. However, delivery time may take up to two weeks (or longer if you are an international user).

Is PayPal Invoicing Safe?

Where there is an exchange of money online, users are expected to exercise skepticism and caution. PayPal is no exception.

To determine whether PayPal invoices are safe to use, let’s look at PayPal’s reputation as a whole. PayPal was founded in 1998 and is one of the oldest and most prominent payment services available. As of 2019, there are 295 million active user accounts on PayPal—a number that continues to grow all the time.[1] Moreover, 19 million merchants use PayPal to process their payments.[2] The sheer volume of users testifies to PayPal’s credibility.

Also, PayPal uses data encryption to safeguard both the buyer’s and the seller’s information. Your personal information is protected by physical and electronic barriers on PayPal’s servers.

Finally, PayPal has a Seller Protection Policy in place for business owners. Depending on your situation, you may be eligible for full coverage on certain transactions.

What Are the Fees for PayPal Invoices?

PayPal doesn’t charge any fees for creating, sending, or cancelling invoices. Combine that with a free membership and PayPal is an attractive option for budget-conscious small businesses.

However, PayPal does charge a fee whenever they process a customer payment for you. PayPal’s transaction rate is: 2.9% + $0.30 for any sales within the U.S. That means that if you invoice a customer for $100, PayPal will take $3.20.

PayPal Fees Vary by Country

If you work with international clients, you can expect to be charged different rates depending on which country you are processing the payment. That means, depending on where the money is going, PayPal will charge an additional fee. For example, if you are invoicing a client in France, PayPal will offer a different rate to process and convert it into your native currency.

To obtain an accurate rate for invoicing international customers, we recommend that you reference your specific country’s PayPal website.

How to Send an Invoice on PayPal: Final Thoughts

Invoicing may be tedious but it’s critical to growing your business. It’s how you itemize the work you do and more importantly, it’s how you get paid on time. Fortunately, PayPal removes the complexity of creating your own invoices. With their “plug-and-play” invoices, you can start collecting payments in minutes. Also, if you decide to follow these steps, you will be joining the millions of other small businesses who use PayPal for their invoicing needs.

Article Sources:

  1. “Number of PayPal’s Total Active User Accounts from 1st Quarter 2010 to 1st Quarter 2020
  2. “PayPal Commerce Platform

Dan Marticio

Dan Marticio is a freelance business writer specializing in personal finance and entrepreneurship. He has written about topics ranging from investing and net worth to startup guides and productivity hacks. He helps small businesses scale and profit through compelling content.

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