How to Create an Invoice: A Starter Guide 0

How to Create an InvoiceA critical part of any successful business is getting paid, and when you run your own show, it’s up to you to play billing department (along with marketing department, and customer service department, and a dozen other departments).

If you’re new to the game, doing something as basic as creating and tracking invoices can seem overwhelming. So here’s everything you need to know to get started sending invoices that look professional, are easy to track, and—most importantly—get you your hard-earned money.

Invoice-Creating Tools

While you can create invoices in Word by playing around with images and templates, it will take a ton of time and won’t necessarily turn out looking as sharp as you’d like. It also adds an extra level of work for you as you’ll need to create a separate spreadsheet for tracking all of your invoices and payments, remembering when to send reminders, etc.

The quickest and easiest way to create and track invoices is by using an invoice-creating system. Not only will your invoices look top-of-the-line, but these systems allow you to track invoices sent, payments received, and much more, all from the same easy interface. It’s like your own billing department already set up for you, making it easy to do thing like run reports, track time and expenses, and create estimates.

FreshBooks often gets top billing as an easy-to-use cloud accounting solution, and it’s personally my favorite. It’s free for your first client, and after that plans start as low as $19.95/month. Also popular are Harvest and Paydirt—check them all out to see which one best fits your needs and preferences.

You can also create invoices through PayPal, but beware that you may incur some considerable fees in doing so. Many systems will give you the option to offer PayPal as a payment method, but at less of a cost to you. FreshBooks, for instance, allows you to accept PayPal payments for the “business” fee of a flat $0.50 per invoice.

Invoice Essentials

Okay, so you’ve got your system of choice picked out. You can make your invoices as bare bones or as fancy as you like (although not too fancy pants—you don’t want them to look cluttered or confusing), but here are the absolute must-haves you should be sure to include:

A custom header. Nothing says “professional” as effectively as a snazzy header. If you have a logo for your company, include that at the very top, along with your company name (or your name, if you’re a sole proprietor). Underneath, include all of your pertinent contact information, including mailing address, phone number, email address, and website if you have one. Bold at least your company name (or make it a slightly bigger font) so it stands out nice and clear.

Your client’s information. This includes the name of the company or individual you’re billing, the name of your contact person at that company, the company address, and the email address of your contact.

Invoice number and date. How you number your invoices is up to you. Some people like using specific references for each client—for instance, client A’s invoices would start with invoice “A00001” and client B’s with invoice “B00001.” Others prefer to keep it simple by numbering their invoices in sequential order of when they were created. Whatever system you use, make sure there’s a number somewhere on the statement so you have something to refer to when tracking statements, contacting clients, etc. Also be sure to include the date of the invoice up top.

Statement of services. This includes dates worked, description of services, quantity (for products) or hours (for services), cost per unit or hourly rate, and totals. If you oversee multiple projects for one client, make it easy to read by either grouping your services by project or sending a separate invoice for each project.

Any terms or conditions. Do you require payment immediately, or does your client have 30 days to pay before incurring a late fee? Have you included something that needs explaining, like a discount or an extra charge? Be sure to list this out clearly to avoid any confusion.

How you can be paid. If you use an invoicing system, it should already specify this somewhere on the invoice or on the email you send your client (if you send bills electronically). If not, be sure to tell clients how they can pay you! If they can pay via PayPal, provide your PayPal email. If you accept checks, give them your address and specify to whom the check should be made out. If you accept credit card payments, tell them how to send them.

Timing

Billing clients on the first of every month, for the prior month’s services, is always the easiest way to go. Some clients, however, do prefer to be billed when a project is complete, so make sure you specify in your initial contract or project agreement how exactly billing will be structured so you’re both on the same page.

And it’s as simple as that! A few clicks, a little setup work, and you’ve got your own billing department up and running—even if it’s only a department of one.

What other tips would you offer someone just starting out? Or, if you are just starting out, what other questions do you have?

About the Author Kelly Gurnett is the Managing Editor of Career Attraction, Editor-in-Chief of CareerMeh, Assistant Editor of Brazen Life, and runs the blog Cordelia Calls It Quits, where she documents her attempts to rid her life of the things that don’t matter and focus more on the things that do. Read more »

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