how-to background6 Examples of Invoices to Secure Timely Payment from your Customers

6 Examples of Invoices to Secure Timely Payment from your Customers

By Anna BenzaquenPublished: 4/21/23

Creating an adequate invoice is a critical aspect of running a successful business. Not only does it ensure timely payment, but it also helps build a professional image and fosters strong relationships with clients.

However, creating the perfect invoice can be daunting, especially for new business owners.

Find everything you need to know about creating a professional and effective invoice, from understanding the critical elements of an invoice and knowing the different examples of invoices 👌

With these tips, you’ll be well on your way to creating invoices that get you paid on time and build trust with your clients and employees. 🤩

What is an invoice?

An invoice is a document you (or your company) send to a buyer or vendor to collect payment that includes the cost of the purchased products or the description of the services rendered to the buyer.

✅ Invoices are handy documents, as they provide you with to ability to:

  • Keep your financial records up to date
  • Track your payables and receivables
  • Give you legal protection
  • Facilitate your tax filing process by helping your report your income
  • Gain insight into your customers’ buying patterns to develop marketing strategies

Free Template to draft a good invoice

Drafting a good invoice first involves understanding the different examples of invoices and then knowing all the information your invoice should include to guarantee timely payment.

Example of an Invoice Template - Free Download

If you’re looking for an invoice template in Excel format, look no further. We have just what you need in an easy-to-use Excel template:

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What information to include in an invoice?

When creating an invoice, you should ensure that it contains all the information your customer will need to pay you on time.

A good example invoice should include the following basic information:

  • The word “invoice”
  • Invoice number
  • Date of service rendered
  • Date of issue
  • Contact and name of the seller
  • Contact and name of the buyer
  • Terms and conditions of payment
  • Description of each product or service
  • Cost of each product
  • Tax rates (if applicable)
  • Total amount owed with relevant currency
  • A personalized note (if applicable)

Guide to Making an Invoice for the first time

Sending out your first invoice can be daunting, especially if you have little to no experience as to what it should include. Here are some easy steps to making an invoice for the first time.

#1 Create a standard invoice template

Whether you’re a small business or self-employed, consider your invoice branding to ensure consistency for all future invoices. Consider:

  • Color and logos
  • Professional headers
  • Your contact information
  • Tax ID (if applicable)
  • Your company’s registration number (if applicable)

#2 Include invoice information

You should number each invoice, so come up with a handy invoice ID template for all your invoices. You and your customers will be able to find them more easily in your respective.

#3 Include important dates

Dates are critical. You want to make sure you include when you rendered your services/sold your goods, and when you issued the invoice. This is especially important during tax season and for your bookkeeping.

#4 Description of goods and services rendered

The more detailed you are in describing the goods or services rendered, the lower your chances of encountering miscommunications down the line.

#5 Calculate income tax withholdings

If you’re a small business, you will want to know how much you should take from your employee’s paychecks.

You’ll need your employee’s W4 form, the gross pay per period, and the IRS income tax withholding table.

Use a tax calculator for the current year to find the withholding amount.

#6 Include payment terms

You should include all the information relates to the payment terms, including:

  • Taxes breakdown
  • Payment due date
  • Late payment penalties

#7 Add relevant notes

If you believe some information might be misconstrued, add relevant details at the bottom of your invoice to make things are clear as possible.

What are the different types of invoices?

There are many types of invoices, and the invoice you send out will depend on the service rendered or the goods purchased.

Some examples of invoices include:

Proforma invoices

A proforma invoice states a seller’s commitment to delivering certain goods and services to the buyer for a predetermined price. A proforma should include the following:

  • The term “Proforma invoice”
  • The wording: “This is not a tax invoice”
  • Company name, contact, address of the seller
  • Name and address of the buyer
  • Date of issue and the due date
  • Description of the goods
  • Duration of the price validity
  • Access to applicable terms or conditions
  • Terms of payment
  • Expected VAT amount

Commercial invoices

A commercial invoice refers to a document used as a customs declaration. You will send a commercial invoice if you export goods across international borders. Your commercial invoice should include:

  • The term “Commercial Invoice”
  • Company name, address, and contact number
  • Seller or Exporter’s name and address
  • Buyer or Importer’s name and address
  • Consignee’s name and address (person receiving the shipment)
  • Supplier’s invoice number
  • Invoice date
  • Purchase order number
  • Terms of sale
  • Tracking information
  • Carrier
  • Port of loading
  • Final destination (if it differs from consignee)
  • Identifying marks and numbers
  • Full items list and description (no abbreviations)
  • HS code
  • Country of origin
  • Quantity and unit of measure
  • Unit cost per item (cannot be zero value)
  • Total units shipped
  • Grand total for all goods
  • Total adjustments of any tooling, NRE, prepaid materials, discounts, or design in addition to the unit cost per item
  • Invoice total (grand total + total adjustments)
  • Authorized signature of the party submitting the commercial invoice

The requirements of a commercial invoice are extensive and must be diligently followed to avoid issues at border control.

Credit notes

If you purchase goods that arrive damaged or that were accidentally purchased, the seller will issue you a credit note. A credit note should include:

  • The term “credit note”
  • Customer information
  • Your business information
  • Date issued
  • Credit note number
  • Original invoice reference number
  • Item descriptions, quantities, and prices
  • Total amount credited

Retainer invoices

A retainer invoice is sent to customers if they make an advance payment for a product or service. This amount is then deducted from the customer’s final payment on delivery or completion of work. A retainer invoice should include:

  • The term “Retainer invoice”
  • Vendor contact details
  • Customer contact details
  • Requested retainer amount and payment due date
  • Requested payment method
  • Terms of payment
  • List of services paid for in advance
  • An itemized list of all services covered by the retainer
  • Late payment fee conditions
  • Total project cost and retainer installments, if applicable
  • Breakdown of what is included in the retainer fee

Timesheet invoices

Timesheet invoices refer to a document a customer sends out to charge for work or services rendered hourly, per the agreed-upon hourly rate. A timesheet invoice should include:

  • Employee name
  • Employee ID # (if applicable)
  • Employee title
  • Number of agreed-upon hours per week worked
  • Invoice start & end dates
  • The in/out times for each day worked
  • Total hours worked for each billable day
  • Number of hours of overtime/sick/vacation time (if any)
  • Employee’s hourly rate
  • The total invoice amount owed (hourly rate x total hours worked)
  • Description of the work done
  • Employee signature
  • Supervisor/employer’s signature

Recurring invoices

Recurring invoices refer to a document sent regularly for repeated transactions. For example, you would send a recurring invoice to customers who subscribe to your service.

You should consider using invoice software to set up recurring invoices. However, regardless of what you decide, a recurring invoice should include:

  • Your customer’s details
  • The products/services you’re selling and the quantity and price
  • Invoice frequency
  • Invoicing start date
  • Number of occurrences
  • Sending options

Summing up the different examples of invoices

Mastering the ins and outs of invoicing is not always a straightforward process. That’s why understanding all the different examples of invoices out there before you bill your clients is a critical step in ensuring your process is efficient and that you get paid promptly.

Whether you use commercial invoices or want to use invoicing software to set up recurring invoices, always make sure you complete your predetermined checklist of information to include.

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