How to Make a Simple Invoice?
The process of billing clients is a necessary evil. Though uninteresting, they are an important part of your job and key to getting paid on time and correctly. Preparing a well formatted simple invoice allows you to keep track of what payments have been made, the outstanding ones and those that are overdue. For these reasons and more, it is necessary you create one. More importantly, it should be well formatted and align with standard invoice templates in the world over.
Below, we’ll cover:
- What Does a Simple Invoice Mean?
- How to Make a Simple Invoice?
- What Should Be Included on an Invoice?
- Can an Invoice Be a Receipt?
The process of billing clients is a necessary evil. Though uninteresting, they are an important part of your job and key to getting paid on time and correctly. Preparing a well formatted simple invoice allows you to keep track of what payments have been made, the outstanding ones and those that are overdue.For these reasons and more, it is necessary you create one. More importantly, it should be well formatted and align with standard invoice templates in the world over. Moving on, you will be exposed to what a simple invoice is, how to make one, among others.
What Does a Simple Invoice Mean?
A simple invoice is a skeletal invoice that contains only the basic components of a standard invoice. In other words, it outlines the very basic details like description of the products, quantity, price, payable amount, payment due date and contact information of all concerned parties.
The focus here isn’t style but the details contained in the document.
How to Make a Simple Invoice?
A simple invoice should contain just the basic information needed for a seller, freelancer or consultant to bill their clients.
Enter contact information
The first entry on your simple invoice should be the contact details of your company and that of the client. The header section should contain your name, phone number, email address and brand’s logo. Also include the billing name, contact address and other contact information of the client.
Insert an invoice date
The invoice should include the invoicing date. This date would make it easier to file invoices, track payments and manage your finances.
Develop a sequential simple invoice numbering system
You need to establish a unique invoice numbering system and assign an invoice number to each invoice. This invoice number makes it easier to monitor or track invoices for bookkeeping purposes.
It also comes in handy when you need to sort out payment issues with a client since this number acts as a reference number.
List your goods and services
An invoice should contain a list of all the services you provided or goods you supplied to your client. The common format is a basic table of four columns. Each column has the heading:
- Product/Service description
- Quantity/Billable hours
- Pay rate
- Subtotal for product/Subtotal for service
Include as many rows as possible to accommodate the listed products or services.
State succinctly your payment terms and highlight the payment methods you are most comfortable with. This may include:
- Payment platforms like PayPal, Payoneer and SKRILL
- Bank transfer
- Mobile transfer
- Credit/Debit card payment
If you choose to add taxes or discounts to the goods you are supplying or services you have provided, this is the right section to include them.
Amount due and payment due date
Finally, add the total amount due and the payment due date. To make this a standout section of your invoice, you can write it out using a bold font. Avoid any form of ambiguity by writing out in clear terms what you mean. A Payment due date written as “Payment due November 2nd, 2020" will always be a better option than just writing “Payment due in two weeks.”
What Should Be Included on an Invoice?
Once you have drafted your business invoice in accordance with the guidelines provided above, you may want to check through to be sure they have the following definitive list of items. All invoice examples and templates must contain the following before they are considered standard.
- Heading with the word “Invoice”
- Invoice number
- Seller name, contact address, email address and phone number
- Client name, phone number, billable contact address and email address
- List of products or services provided
- Cost per unit of these goods or services
- Invoice date
- Payment terms
- Payable amount and payment due date
Can an Invoice Be a Receipt?
An invoice and a receipt aren’t the same thing and hence, cannot be used interchangeably. To begin with, an invoice is issued before payment has been made while a receipt is issued after delivery and payment has been made.
Invoices are documents issued by a seller to their client/buyer, requesting for payment for goods sold or services provided in accordance with the contract’s agreement. An invoice highlights in detail the products sold, their quantity and the payment due for the shipment. They also include a payment due date.
A receipt on the other hand is a buyer’s proof that they have paid for a particular shipment. Among other things like contact address, and whatnot, it outlines how much was paid and the adopted payment method rather than how much should be paid as it is with an invoice.
Finally, the amount written in the invoice is recorded as a debit under expense or asset account and credit under accounts payable while in the case of receipt, the payment is recorded as credit under sales and debit under accounts receivable.
What document format is best for drafting a simple invoice?
There are two main options - Microsoft Word or Microsoft Excel. Both options have their pros and cons. If your invoice is going to need lots of mathematical calculations, you may have to rethink your decision to use Word. Excel will be a better option here.
If you need a little more customizing like increasing your column widths or adding styles, Word is your best bet. However, adding prices on the program can be a little difficult to do.
How do I assign invoice numbers?
An invoice number may be assigned sequentially, chronologically or by use of project or customer ID. The following are examples of the following methods of assigning invoice numbers
Sequential - You can assign 001 to your first invoice sheet, then go on and on. If you choose this method, your invoice number should look like this: Invoice #001, Invoice #002, Invoice #003, Invoice #004.
Chronological - this numbering system is based on the dates. An invoice created on July 25, 2020 can be assigned an invoice number of 2020-09-25-0025
Project ID- You may give a particular project a unique project ID (for example, 3567) and number invoices for this project thus: 3567-001, 3567-002 etc.
Customer ID: You may assign a unique customer ID (010) to a customer and then number their invoices thus - (010-001, 010-002, 010-003).
Drafting an invoice from scratch should come easy if you follow the guidelines provided in this article. Otherwise, download any of our free simple invoice templates and get started with the invoicing process asap. You can also take advantage of its amazing invoice generator to develop a simple invoice with minimalist design.