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Updated Oct 23, 2023

How to Create an Invoice

Invoicing customers for your products and services is part of doing business. Here's how to create an invoice to give to your clients.

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Max Freedman, Business Operations Insider and Senior Analyst
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This guide was reviewed by a Business News Daily editor to ensure it provides comprehensive and accurate information to aid your buying decision.

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If you’re familiar with the basics of small business accounting, then you know that signing a new client doesn’t mean you’ll get their cash right away. If anything, you might have to wait several weeks or months before the money in your company’s accounts receivable hits your business’s cash account. And if you don’t send invoices for your work, you might never get that money.

Neglecting to send invoices can delay your clients’ payments since, often, clients need to receive invoices to trigger their payment processes. Since your clients likely record invoices in accounts payable upon receipt and pay according to their in-house pay schedule, your clients may miss or ignore payments without invoices to trigger their pay processes. Fortunately, sending invoices is easy. Below, we’ll walk you through how to create an invoice.

[Related Article: Accounts Payable vs. Accounts Receivable and How They Differ]

What is an invoice?

An invoice is an itemized document listing and detailing the prices of all products and services a client has purchased from your company during a given period. Once your client receives your invoice, they must pay the invoice within the period specified in your terms and conditions.

Without invoices, small businesses like yours would likely have a far tougher time pursuing client payments and receiving them on time. Invoices also double as records of your work for a client, and this record can be useful for accounting purposes, renegotiating terms with a client or even if you’re facing an IRS audit. Your clients can likewise use invoices for recordkeeping and accounting.

Key TakeawayKey takeaway
An invoice is an itemized document containing all work you performed for a client during a period alongside the prices you’re charging for each line item.

What is included on an invoice?

You should include the following in your invoices:

  • The date of the invoice
  • The name, address, phone number and email address of both your company and your client
  • A unique invoice number or identifier
  • Payment terms such as net 30 or a specific payment deadline
  • An itemized list with a unit price, quantity and total price for each item
  • A clearly started total invoice value
An invoice contains the business basics of your completed work for a client alongside payment terms.

How to create an invoice

It’s one thing to know what you should include in your invoice, but it’s another to present this information in a manner that your clients can easily understand and act upon. You can make sure your invoice is fully comprehensible by taking the following steps:

1. Add a header

Your invoice should begin with a header that includes the invoice date alongside contact information for both your company and your client. Often, your business information will be on the left-hand side and that of your client will be on the right-hand side, but sometimes, your information can go atop your client’s.

2. Designate an invoice number or identifier

If the invoice you’re sending is your first for a client, you can include “Invoice #0001” in your header (the extra zeros in the number prevent spacing changes if you reach thousands of invoices). Alternatively, you can set an identifier related to the service period, such as “Invoice #2021Q1” or “Invoice #FEB2021.” Even if your invoice identifier specifies the period that your invoice covers, you should include an exact invoice date alongside the identifier as well.

[Related: Learning What an Expense Report is to Understand Your Business’s Financial Status]

3. Insert your itemized table

The core of your invoice is your itemized table of services and prices. Here, you’ll list each item and its quantity, rate per unit (which can be a price per item or an hourly rate) and total cost. At the bottom right of the table, you’ll add each line item’s cost and record the sum as your invoice’s total value. You should either make sure this number is bolded or list it elsewhere as the total due in a large, obvious font. In some cases, you’ll need to charge taxes as well.

In your itemized table, you can also include the date or timeframe in which each line item was provided and detail what the indicated service encompasses. Doing so can help make your work and pricing more transparent to your client and possibly encourage faster payment. You can also facilitate payment by including more than one itemized table. For example, if you are providing services to your client both within their office and off-site, you can create one itemized table for each location.

4. Add footnotes

Often, invoices are self-explanatory lists of services, quantities and prices, but sometimes, they can’t tell the whole picture. For example, it might not be immediately evident that you’re applying a discount to one of your line items. To clarify this discount, add an explanatory footnote at the bottom of your invoice. This way, your client knows that future invoices may display higher rates for the same work. If your invoice doesn’t require clarifying footnotes, you can still add a thank-you note – a little gratitude can go a long way.

Did You Know?Did you know
To create an invoice, start with a header, decide on a unique invoice identifier, fill out your itemized table and leave footnotes as needed.

Sample invoice

Now that you know how invoices work, it may be helpful to see one in action. That’s why we’ve provided an example below:

February 26, 2020                                                                        INVOICE #FEB2021

John Doe                                                                           Bill To: Excellent Client, LLC

1 Times Square                                                                           1 Hollywood Boulevard

New York, NY 10011                                                                  Los Angeles, CA 90045

1-800-111-2345                                                                                     1-800-999-8765                                                        


ProjectQuantityRate per unitProject rate
Service 110$200.00$2,000.00
Service 220$300.00$6,000.00
Service 3*15$150.00$2,250.00
Service 410$350.00$3,500.00
Service 55$200.00$1,000.00
Service 6^10$250.00$2,500.00
TOTAL DUE BY 3/31/2021$17,250.00


* As previously discussed, we will no longer be offering service 3 starting next month.

^ For service 6, a discount of $50 per unit was applied. Thank you as always for choosing MyCompany!

Invoice templates and generators

Now that you know how to create an invoice and have seen a realistic example of one, you can start making your own using a template or generator. Below are five options:

  • Invoice Home offers 100 different invoice templates ranging from standard designs to options with more eye-catching appearances.
  • Invoice Simple offers three invoice templates that you can download as Word, Excel or other customizable files.
  • Speaking of Word and Excel, Microsoft offers dozens of its own downloadable templates for both programs.
  • FreshBooks offers several templates in Word, Excel, PDF or G Suite options.
  • Canva offers hundreds of extensively customizable invoice templates that balance clear information with modern designs.

Once you’ve chosen your template, just follow the above steps to create invoices that clients won’t just understand, but will also act upon.

author image
Max Freedman, Business Operations Insider and Senior Analyst
Max Freedman has spent nearly a decade providing entrepreneurs and business operators with actionable advice they can use to launch and grow their businesses. Max has direct experience helping run a small business, performs hands-on reviews and has real-world experience with the categories he covers, such as accounting software and digital payroll solutions, as well as leading small business lenders and employee retirement providers. Max has written hundreds of articles for Business News Daily on a range of valuable topics, including small business funding, time and attendance, marketing and human resources.
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