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How to Send an Invoice

Whether you’re new to the world of invoicing or an established business owner who needs to brush up on your skills, it can take a while to get invoicing right. While there are various ways to send an invoice, being professional is key to best practice. In addition, when you understand how to send an invoice correctly, it’s more likely it will save you money, time and, more importantly, help you to get paid on time.

If you have any doubts about how to go about sending an invoice, this post covers all the essentials you need to start.

1. Why send an invoice?

Sending an invoice firmly documents a sale between the buyer and a seller for goods or services purchased. It gives both parties a record of the transaction by stating the payment terms, an itemised list with costs and should give information on how to pay it. For business owners or solopreneurs, issuing an invoice helps with tracking your finances and record-keeping.

2. Before you send an invoice

There are necessary details to consider before sending an invoice. If you don’t get the following right, then you reduce the chances of a client paying you sooner.

2.1. Getting the price right

Selling a product for a fixed price is usually a straightforward process for sending an invoice. However, if you’re selling a service, it’s common practice to discuss pricing and billing with your client in advance. If you’re working on an long-term project where timings aren’t precise, then ideally, you should give a client an estimated price. In each instance, there is the possibility of cutting deals or discounts which should also be discussed prior to a sale. Additionally, creating positive communication with your clients beforehand can help to strengthen working relationships and be paid more promptly.

2.2. Getting the timing right

In the majority of cases, invoices should be sent immediately after a purchase or on completion of a service. On the other hand, some people prefer to send them at the beginning or the end of a month. This method is also appropriate for sending recuring or subscription- based invoices. Alternatively, you might mutually agree to timing a sent invoice in relation to a client’s personal preferences.

2.3. Getting the terms right

Setting out your payment terms and conditions clearly is another necessity to do before pressing send. Payment terms should explain when you’ll invoice them and the length of time a customer has before making a payment. It should include any taxes or VAT liable with the sale, and adjusted accordingly if you’re selling to a customer in another country. If your payment terms are confusing, it will probably take longer for a client to pay you.

3. Writing an invoice

When writing an invoice, the following are things you should bear in mind:

  • Professionally and politely written
  • Clear and simple language
  • Make your header and logo stand out
  • Invoice sales details such as the due date, invoice number, the amount owing, the service offered and payment terms
  • Check all details on completion, including the correct email address

If you make your invoice vague, with incorrect or missing information, then you’ll end up confusing your clients and delaying a payment.

4. How to make an invoice

Now that you’ve organised yourself to get an invoice ready for a client, your next step is to issue and send it. Essentially, there are 2 main ways of sending an invoice: electronically or by mail.

4.1. By post:

Although a traditional method, mailing an invoice is also an out-dated method of sending invoices. It’s slow, time-consuming and costs more for printing paper, postage, etc. Paper invoices are also wasteful for the environment and are more vulnerable to getting lost. However, in some cases, there might be a specific reason; for example, a customer who doesn’t use computers.

4.2. By email

Many new businesses will start out sending invoices manually via an email. This involves using program such as Microsoft Word or Google Docs whereby you can choose from a pre-designed template to enter the details. Alternatively, you can use my self-employed invoice template along with how to set it up and what to include.

Once you have completed a template, you can send it as an attachment in an email. Normally, a short message will suffice in the body of your email and don’t forget to include an subject line referring to the invoice details. However, it’s a good idea to save it as a PDF so it cannot be edited, thereby limiting any risk of fraud.

4.3. Using invoicing software

A simple way to create and send an invoice securely is to use an online invoice system such as Xero. This enables you to not only send it, but know when an invoice has been opened and paid. It also allows the customer to pay directly as invoice management systems incorporate payment methods into online invoicing.

Depending on the invoicing software you use, you’ll also have access to additional tools, such as financial reporting, automation and tracking, etc. Often, software is part of an existing feature of a payment method like PayPal which is another convenient way of sending invoices electronically.

5. After you send the invoice

This will depend on the amount of time you’ve given a client to pay an invoice. Whether it’s 7,14 or 30 days, it’s good practice to remind them closer the time when the actual due date is approaching. It’s also worth checking you’ve sent it to the right person or department, and if they need further clarification about a payment. Keep communication to the point and be polite to increase your chance of a payment on time.

Bear in mind that customers appreciate something beneficial to them so offering a discount is a good incentive to receive an early payment.

Final thoughts

Knowing how to manage invoicing is essential in any business or freelancing gig. To make life simpler, try and familiarise yourself with the latest online tools, especially when it comes to automating invoices as this will free up your time to complete other important business tasks. When you create professional invoices, you’ll impress your clients while ensuring collecting payments is less time-consuming.