Method of Creating an Invoice

An invoice is an essential financial document. It allows buyers and sellers to create business transactions between them. Furthermore, it provides a legal framework that makes the trade of goods and services legal in the eyes of the law. Hence, an invoice must be valid to be usable. The validity of this document depends on how it is created. In this article, you will learn how to create a valid invoice.

Branding

Branding is usually the first step in making an invoice. Nonetheless, is not necessary. A business can create an invoice without branding it. Customizing this document makes it more professional. For this reason, many entities would have a unique template for their invoice.

Header

The header contains essential information about a business. Therefore, you find information such as business name, contact information, and address. Usually, you will see “Invoice” written within the header of the financial paper to signify what it is. But some entities will include it in the main body of the document. Companies that remit sales tax to the government will usually provide their tax ID, which is required by law. However, the exact information that is contained on headers may depend on state laws.

Invoice Number

An invoice number is a unique identifier that differentiates one invoice from another. Most businesses use a standard format to categorize the invoices. As a result, you may find an invoice with unique identifiers using numbers, alphabets, or a combination of both. However, a company needs to be consistent when issuing invoice numbers.

Dates

The validity of an invoice can easily be questioned if it does not contain dates. These essential dates include the day of issuance of the document and the date of delivery or supply. As such, no serious business will create an invoice without these dates.

Item Description

This section of the document provides detailed information about goods or services delivered to the buyer. It includes information about goods or services, the cost for items, quantity, subtotal, and total. The subtotal is the total without taxes. However, the total provides the exact amount a buyer is expected to pay the seller for the provision of goods or services.

Payment Terms

The payment terms are another essential piece of information that must be included on an invoice. It defines the method of payment. Therefore, you may find Bank information such as account number and sorting code in this section of the document. In addition, the payment terms would usually specify the timeframe within which payment must be made. The seller may also state penalties (interest) that the buyer may incur for the delay in making payment. Similarly, discounts and promotional information may be included in this section.

Additional Comments

This section of the invoice lets the buyer provide relevant information that will not fit under the headings mentioned earlier. Such information may include specific requests made by a buyer. In some cases, a seller can write greetings and other salutations, especially during festive seasons.

Other useful articles:

• What are Different Types of Invoices
• What Does a Basic Invoice Look Like
• Main Invoice Contents and Where Do We Use Them
• Is Invoice and Bill - the Same Thing
• How Does Electronic Invoicing Work
• How to Calculate Invoices
• Which is of More Importance? Bill, Invoice, or Purchase Order?
• What Basic Information is Needed on Purchase Order?
• Method of Using Purchase Order and Why Purchase Order Is Important
• Invoice Types and Requirements in Brazil
• Invoice Types and Requirements in Chile
• Invoice Types and Requirements in Korea
• Invoice Types and Requirements in England
• How to Keep Track of Invoices and Payments
• GST Invoice Guide
• Invoice Types and Requirements in the United States
• Invoice Types and Requirements in Germany
• The Future of Invoicing
• Importance of an Invoice
• How Does a Purchase Order Work
• Method of Creating an Invoice