To begin my research I began by looking at a guide on how to create an invoice. A post I found particularly helpful was How to write an invoice: what to include in an invoice template by Sam Bromley.
Bromely breaks the stages of creating an invoice template into the following steps.
- Make your invoice look professional
- Clearly mark your invoice
- Add company name and information
- Write a description of the goods or services you are charging for
- Don’t forget dates
- Add up money owed
- Mention payment terms
Make your invoice look professional
This is an area that I will look at in more detail and follow a design process to achieve. The directions provided in this article are to use templates etc.
Clearly mark your invoice
Clearly title the document as an invoice- this is also in accordance with the guidelines provided on the gov.uk website. The invoice should also include a unique identification number. This should be used as a point of reference. All invoices should be documented and kept record of to avoid duplicates. My personal preference is to match the unique identification number to the date. This means that clients will not be aware of how many invoices you have sent out between orders.
Add company name and information
The following should be included on all invoices:
your company’s name, address, and contact details
your customer’s company name and address and contact name
your registered office address and company registration number if you’re a limited company
As I am not registered as a limited company this would not be applicable. I do however need to register as a sole trader once I have earned over £1000 within a year as outlined on the gov.uk website.
Write a description of the goods or services you’re charging for
Including a description is important as it allows you to track payment of specific items with accuracy. It also gives clients a clear account of what they are paying for. A quantity and price should be included here also.
Don’t forget dates
This is important as it provides timelines that make invoices and items trackable. A date must be applied to the issue of the invoice, this can then be used in the referral of payment terms e.g. if payment is due 30 days within receipt of invoice. A date should also be provided for the supply of goods/ services.
Add up money owed
Add a total amount to the invoice and in VAT if necessary. It is noted here that if a discount has been agreed it is up to the customer to subtract the amount. However, as a designer, the likelihood is that I will be working closely with clients and in the interest of maintaining good client relations if a discount were agreed beforehand I would include it on the invoice.
Mention payment terms
As stated above the inclusion of payment terms is very important. By adding payment terms to an invoice you should, in theory, remove any awkward conversations relating to payment. If payment is not made within the stipulated timeframe you can simply refer back to the invoice and hopefully on receiving a reminder a payment will follow.
It can also be helpful to include a method of payment and include your bank details if a direct bank transfer is your preferred method.
If I were to become VAT registered I would need to issue VAT invoices.
As a side note, it is also important to keep track of invoices. Working as a freelancer I find that I do not have many invoices to manage on a monthly basis and an Excel spreadsheet is more than adequate in helping me to keep track.
This has provided me with a really great overview. It is also good to be able to double-check that my current invoice included all of the above items.