We work with many different businesses in various sectors and therefore have the opportunity to see many types of invoices provided by suppliers for both goods and services. It is surprising how many invoices do not include basic information.
We thought it would be useful to set out what information you should include on your invoice together with some of our Top Tips:
- Your invoice should have a unique number and all your invoices must have consecutive numbers if you are VAT Registered. Make sure your invoice number can be easily seen.
Top Tip: If it doesn’t have a number you and your customer have nothing to identify it by.
- Your invoice must have a date. It should be dated either the date you are raising the invoice or with a date very close to the date you are sending it. If you are VAT registered the invoice must be dated within 30 days of the date you supply the goods or services.
- Your invoice must have the correct address of your customer, even if it is being emailed, and be addressed to the correct person. The correct person may not be the person you deal with regularly especially if you deal with large organisations.
- Your invoice must have your company name, address and contact details. A customer cannot contact you with any queries, to find out your bank details for payment or send you a remittance advice without this information.
- If you are VAT registered your invoice must show your VAT number.
- Include the Purchase Order Number if your customer has provided one.
- Your invoice should set out clearly what is being invoiced and in sufficient detail to identify the goods or services supplied.
Top Tip: It is much easier to raise an invoice as soon as the work is complete than sometime later when you have forgotten what you did.
- Your invoice should also set out clearly the amount you are charging. If you are VAT registered you must show the net amount, the VAT element and the gross amount separately. You must also show what rate of VAT you are charging.
Top Tip: Ensure your invoice is totalled correctly and agrees, where relevant, with any quote you have provided.
- Add your payment terms to your invoice. If you don’t indicate when you expect to receive payment you will never be able to follow up a late payment. You should set terms which suit your business and/or the customers you are dealing with. Many large organisations won’t agree anything less than 60 days so you have no choice but smaller businesses need cash flow and therefore much shorter terms are generally acceptable.
- Add your bank details to your invoice to encourage your customers to pay by bacs rather than cheque.
Top Tip: Cheque is a much more expensive option for both you and your customer – around £1 to bank it and £1 to write it.
Don’t give your customer a reason not to pay your invoice - include all relevant information, check the values, send it to the correct person and set out your payment terms.