Source: Sage
Cash is the lifeblood of any business and being paid on time is essential to keeping it flowing.
This starts with your invoices—documents that list the goods/services you’ve provided and how much is owed—aka the ‘bills’.
You’ll need a well-designed invoice to make a good impression on customers. And whether you’re a sole trader, limited company or VAT-registered business, you’ll need to make sure your invoices meet UK legal requirements.
Using one of our invoice templates or accounting software makes it easy to create and send professional invoices that meet these requirements, look great, and help you get paid on faster.
ln our guide on how to write an invoice, in the UK, we cover the following:
- What to include in an invoice
- Different kinds of invoices
- Common invoice payment terms
- Common invoice payment methods
- Sending your invoice
- How to send your invoice
- How to get paid on time
Download your free professional invoice templates
What to include in an invoice
A standard (non-VAT) invoice must include:
1. ‘Invoice’
Identify the document with the word ‘invoice’ to differentiate from a quote, credit note or receipt.
2. A unique invoice number
The number must be unique to each invoice (without duplicates) for clear identification, and you must keep a record of the numbers and references used.
Using a sequential numbering system is the easiest way to manage this.
The reference can contain letters as well as numbers.
3. Your company name and address
This is different for sole traders and limited companies but essentially, your invoice details must show clearly your trading name, business address and also, where you can be contacted by the customer, in case of query or dispute.
4. The company name and address of the customer
This is standard procedure on all invoices (except simplified VAT invoices) but is important for customers who want to claim back any VAT that has been charged.
5. A description of the goods and services
When writing an invoice, make sure you include a clear description of the goods and services being invoiced for, with each service or item on a separate line for easy identification.
6. The date of supply
Known as the ‘supply date’, this is when the goods or services were issued. The supply date may be different to the invoice date but is usually within 30 days.
7. The date of the invoice
Date of when the invoice was generated and not when the goods were supplied.
8. The amount of the individual goods or services to be paid
If you have a list of items in the description, then each one will be marked with an individual amount.
9. The total amount payable
The sum total of all goods listed on the invoice.
10. Payment terms
Usually defined in your terms and conditions and agreed by your customer.
These are your terms for the length of time to pay and should be marked at the bottom of the invoice. For example, payment within 30 days.
11. Purchase order number
If your customer provides you with a purchase order number, then this should be clearly shown on the invoice.
Some customers may also require that the name of the contact person is shown on the invoice.
Asking for a purchase order is recommended as once generated this is a legally binding contract between yourself and your client/customer.
12. How to pay the invoice
List the different ways that an invoice can be paid and include the bank account references. For example, your bank sort code and account number for BACS payments.
For invoices to international customers, IBAN/BIC/SWIFT numbers should be included.