What to put on an invoice
You will learn
- What you need to include on an invoice
- How to create your unique invoice numbers
- What the tax point or time of supply is
There are lots of really important details that you need to put on an invoice so that your customers know exactly what they’re expected to pay and by when. Having a clear invoice is key to getting paid, and if something unforseen happens like an unpaid debt or customer complaint, you’ll always have it to refer back to, which removes any chance of argument between you and your customer.
With help from Scott McLay at Sage, we’ve brought together the 13 key elements you need to include on an invoice if you’re a VAT registered business.
Image credit: Sage UK
Most of what you need to include is easy to understand, but for the bits that might cause a bit of confusion, we’ll expand a little more.
- Your unique invoice number
The invoice number that you include will be eniterly unique to your business, and each invoice should have a similar, but individual number so you can quickly find it again if you needed to. For example, if your business was called Phoebe’s Flowers, your unique invoice code could be something like PF-01-09-2017-001. This example invoice includes a reference to your business – PF, the date of the transaction – 01-09-2017, and the invoice number – 001.
- The tax point or time of supply
The tax point, or time of supply, section of an invoice lets you and your customer know the date that the transaction takes place between you. The day that your customer places their order isn’t normally the day that you ask for payment, it depends on the business that you run. It could be the day that the product becomes available to your customer. For example, if you sell washing machines and deliver them to your customers, you tax point would be the date that they receive the product, not the date that they placed the order. Or, it could be the date when your service is complete or when you expect the monthly payment for a continuous service. If you’re a photography business, for example, you’d charge for your service once you deliver the finalised pictures to your customer.
If you include each of these elements on an invoice to your customers, you’ll both have a clear record of the transaction that you can refer back to at a later date.