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All You Need to Know About Invoicing: The Complete Guide

What happens when your business gets a large or advance order? How do you keep track of the payment?  

As a business owner, there’s always the possibility that you’ll have to issue an invoice to your customers. That’s why understanding invoicing is a skill that any working professional should master.  

In this guide, you’ll learn:

  • What an invoice is

  • How an invoice works and what it's used for

  • How to create and send an invoice

  • What to include in an invoice

What are invoices?

An invoice is a legal document that lists all the goods or services a customer purchased, with the price they were purchased for. An invoice acts as proof of payment and helps you keep track of requested payments.  

In general, an invoice shows clearly what your customer has purchased, the date it was purchased, and how much each individual item costs.

Why are invoices beneficial?

They help you keep tabs on payments

As a legal document, invoices help you get paid on time and keep track of your payment records, whether an invoice has been paid in full, overdue or not paid at all.

Whether you're a registered business owner or sole trader, all businesses are legally required to keep payment records for 7 years in the United States.

With SumUp Invoices, you can easily view the status in the Invoice history menu on the SumUp App, whether it has been sent, paid, viewed or overdue. You can also manually change an invoice's status if your customer chooses to pay a different way.

They remind your customers

Invoices are a great way to keep track of whether your customers have paid you or still need to pay you. Additionally, you can see what your customer bought and how much they owe for the product or service, making it easier for you to keep track of payments.  

Even better—invoices help you get paid faster. With SumUp Invoices, your customers can pay you in just one click directly from their email. You can also specify when you need the invoice paid by with custom due dates, ensuring your payment gets to you as soon as you’d like. 

How do you create an invoice?

Start with a template...

Creating an invoice is easy and there’s no need to start from scratch. You can find plenty of free invoicing templates online, most of them being created for applications like Word or Apple Pages. There is an abundance of free online tools that can help you create the invoice you want.

Personalizing your invoices can also help make a great impression on your businesses’ brand. From inputting your company logo to making style changes with font and color, you can make your business stand out from others by getting creative.

...or use invoicing software

If you prefer, there are also plenty of invoicing software tools available online. Invoicing software gives you the ability to make invoices quick and easy. Invoicing software also allows you to safely input your business information, from contact information to product details.

With SumUp Invoices, you can create and send customized invoices from your smartphone or tablet, all within seconds. Additionally, the ability to include your company logo and business details on every invoice adds the extra professional touch. SumUp Invoices does all the work so you don’t have to!

When should you send an invoice?

Send an invoice before...

Sending a pre-invoice helps your customer see what products or services you have to offer, at what price and how that fits into their bigger plan. Pre-invoices are usually send before a job is done, or a service is provided such as 

If the services you’re providing are costly, you might want to consider requesting upfront payment or a deposit, particularly if the unexpected cancellation of your services would impact you financially.

...or after the job

Most of the time, invoices are sent after a job or service has been completed. You should always make sure that your customer is satisfied after your service is completed, or that changes don’t have to be made before sending them an invoice.

Recurring invoices

Recurring invoices are usually sent time and time again to a customer. Providing the same service multiple times means the cost of the service should remain the same. You can also set specific times that you want your invoice to be sent whether it’s daily, weekly or monthly.

Milestone invoices

Long-term projects might need set dates for when your customer should pay you. These milestones can range from cost and how much time a service actually takes to provide, so agreeing with your customer on specific dates and costs should be your priority. 

What should you include in an invoice?

As mentioned earlier, invoices are legally binding documents and it’s important that you are legally compliant when creating them. Double checking you have all the right information included can also make a big difference. Even small mistakes or errors can lead to payment delays or not getting paid at all, so make sure everything looks good before sending an invoice.

Requirements

If you’re a US business owner, your invoice needs to include:

  • An invoice number

  • Your company name, address and contact information

  • Your customers name, address and company name (if applicable)

  • A description of the products or services

  • The date the products or services were sold

  • The date the invoice was issued

  • The price of the products or services

  • The total amount due

If you’re a sole trader, make sure your invoice includes your business name and the address. If you’re a registered business owner, make sure you include the company name exactly as it shows on your incorporation certificate. 

Payment terms

Having payment terms included in your invoices can also help make sure your customer pays you on time. Making your own due dates, charging extra for late payments and more is completely up to you, but make sure that these payment terms are clearly defined in your invoice.

Tips and tricks

First, simply adding the word “invoice” on your document can ensure that your customers know exactly what they’re looking at, while differentiating other documents that your customer may be receiving.

Second, including a “thank you” statement can give your business’s brand a positive impression, while informing your customer that the invoice was sent by a real human being. Including this at the end of the invoice can also help improve the business relationship you develop with your customer.

Try SumUp Invoices today

You can create invoices in under a minute with SumUp Invoices and get paid in just a few clicks. SumUp offers an intuitive process to help you avoid making mistakes or missing any important information. There are no fixed costs—you’ll only pay 2.90% of the invoice total plus $0.15 when your customers pay the invoice. 

Best of all, you can collect your payments remotely, allowing you to keep cash flowing into your business from a distance and offer home deliveries. 

Try SumUp Invoices now!

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Rachel Taylor