If you are new to running a business or have recently gone self employed then one of the most important questions you need to answer is what is an invoice? It’s the paperwork by which you will get paid and others will expect to be paid by.
What is an Invoice?
A sales invoice is an official document sent to customers or clients detailing out what services/products you been provided to them and how much they need to pay for them.
You sell 10 computers to your customer for £1,000 each. You need to send a sales invoice to your customer detailing that you have supplied them with 10 computers for a total of £10,000 (plus VAT only if you are VAT registered). You customer can see what you have supplied them with and how much money they owe you.
You have recently gone into business and are furnishing your new office. You order 10 desks from a furniture supplier for £200 per desk. You should expect to receive a sales invoice from the furniture supplier detailing the desks you have bought for a total of £2,000 along with details of how to pay them.
Example Sales Invoice
Every sales invoice looks different. They tend to have a unique design and adhere to business brand standards however the purpose of a sales invoice is to get paid so there are certain pieces of information that should be contained on a sales invoice.
Here is a sample sales invoice from Staples demonstrating some of the key details to be included on a sales invoice.
This sample sales invoice from Staples gives the customer all the information they need to understand what they have ordered, how much they have spent and how/when to pay Staples.
What Details Should I Include on a Sales Invoice?
Even though all sales invoice can take a different format here are the key details you want to make sure you include on your sales invoice to ensure you give your customers all the information they need so you are paid promptly:
Legal Requirements for a Sales Invoice
- an invoice number;
- your name and business name, your trading address and contact information;
- the company name and address of the customer you’re invoicing;
- a clear description of what you’re charging for;
- the date the goods or service were provided (supply date);
- the date of the sales invoice;
- the total amount(s) owed.
If you are VAT registered
- VAT rate being used;
- VAT being charged;
- VAT registration number;
- the total amount owed including VAT.
If you are Incorporated
- Limited Company Name, as per your incorporation certificate;
- Your Registered Office Address;
- Company Registration Number.
- Your bank details;
- Your payment terms for example: upon receipt, 14days or 30 days;
- A description of the work carried out;
- A contact name in your customers organisation;
- PO number if your client has issued one to you.
Sales Invoice Template Download
Design your own sales invoice. Start by downloading our sales invoice template in word which includes all the basic information you need to include and update it to add your own logo and meet your own brand standards.
Note: You should only charge for VAT and show VAT if you are VAT registered.
Anita is a Chartered Accountant with over a decade of experience taking self employed business owners from financially confused to business savvy.
She is the creator of the ‘Go Self Employed’ website, which her corner on the internet where she makes self employment less terrifying.