Invoicing For New Business Owners
If you’re a new business owner, you’ll want to start generating income for your business. But how do you let your clients know that they need to pay you? The answer is simple, you need to invoice them.
But how does anyone know what needs to be included on an invoice? How much detail do you go into and how will your client know that it’s genuine and not just a scam?
This post will cover how to generate an invoice and the information you will need to include on it. Hopefully, once we’ve covered everything, you’ll be ready to start invoicing your clients.
Select an invoice template
Your invoice template will help you to keep your branding consistent and in-line with the rest of your work. While there are a number of different templates you can use, make sure you include the following:
- Your business’ logo
- Your business’ colour scheme
- Your business’ name and address
- Your client’s name and address
- Clear headings
- Your payment terms
- If applicable, bank details or other accepted payment methods
This might seem like a lot to take in, but once you have your template set up, you should only need to change it if something changes within your business.
Add your products or services to your template
Your clients will want to know exactly what they’re paying you for, so the best thing to do is tell them in the invoice.
Add itemised product lines that are as descriptive as necessary to get the point across. For example, “1x 1L Tin of Forest Green Paint”.
Next to these items, you’ll need to include the prices of them. If they’re physical items, it’s likely you’ll be charging per item. Or if they’re more of a service, you can charge based on an hourly rate. Just don’t forget to spell out how much the client will be paying on a line-by-line basis. This will help to prevent confusion for your client and can speed up the payment process.
Be aware that if your business is VAT registered, you will need to reflect this. If you need to charge VAT on the items you are selling, it can be good to include it in the item lines rather than just in the final total. For example “1x 1L Tin of Forest Green Paint | Net £10.00 | VAT £2.00 | Subtotal £12.00”.
Show the final total
The final total your client will need to pay should be clearly displayed and easy for them to find.
If your business isn’t VAT registered, you can simply have the sum of the subtotals. However, if you’re charging your client VAT, you may find it best to split the final total into three parts:
- Net Total - The total of sales before VAT is applied
- VAT Total - The amount of VAT that will be charged on the invoice
- Final Total - The Net Total plus the VAT Total
Make sure you’ve included all the important information
There are a number of items you’ll need to include on the invoice to make sure you and your client know what’s expected and when.
- The date of the invoice - you and your client will need to know when the invoice was issued
- The due date for the payment - your client will need to know when you’re expecting to be paid the money (alternatively, this can be stated as “Please pay within 14 days”)
- A unique invoice number - this prevents you from accidentally sending the same invoice twice, or being paid twice for the same job
- If applicable, an internal reference number - this could be something like an order number or job reference
You can find out more about the requirements from the HMRC website.
Your invoice is ready for sending
Now your invoice has all the information that it needs, you’re ready to send it to your client. There are two ways that you can do this, these are printing and sending as a hardcopy, or emailing a digital copy.
That’s all there is to it
Invoicing is both an exciting prospect and a headache, but as long as you know what you need to include, then it can become a piece of cake.
If you’re thinking this is something you’re going to struggle to carry out, then please check out our sister company QuickFile who can help you with all your accounting needs.
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