What to include in an invoice: A checklist

1Branding elements

2A professional invoice header with your business and buyer’s contact information

3The invoice number

4The invoice date

5A description of the goods/services delivered and their associated costs

6The subtotal

7The taxes, fees, and discounts

8The balance due

9The invoice payment terms and details

10Any explanatory notes and invoice terms and conditions

1Branded invoices

When thinking about what to include in an invoice, it’s important to go beyond just listing products or services. Incorporating elements like your logo, brand colors, and fonts, is a simple yet powerful way to build brand awareness. Every time a customer receives branded invoices from you, they’re reminded of your business. Over time, this consistent exposure keeps your brand top of mind, encouraging repeat business and long-term customer loyalty.

2Professional invoice header

Prominently placing your business name, address, and contact information (email address, phone number, website) in the invoice header helps buyers quickly identify who the document is from and saves them time if they need help.

Plus, by having your buyer’s business name, contact person, contact information, and business tax ID (if applicable) upfront, you can help streamline your record-keeping.

3Invoice number

One of the other things to add when thinking “what to include in an invoice” the invoice number. This is a unique identifier for each invoice your business issues, making them easy to track and manage.

When deciding on a format for the number, you have several options. For example, you might use a sequential numbering system (001, 002, 003), a date-based system (2023-05-01), or a combination of both (2023-05-01-001). Adding a prefix such as “INV” or “IN” can also help differentiate your invoices from other documents.

To streamline the process, consider using an invoice number generator. This tool automatically assigns a unique number to each invoice, saving you time and reducing the risk of duplicates or errors. Using a generator can be especially helpful as your business grows and the volume of invoices you send increases.

4Invoice date

The invoice date is when you issued the invoice. This serves as a handy reference point for both you and your buyer when tracking the payment due date.

5Description of goods/services delivered

Include a clear and detailed description of services or goods provided, along with their corresponding costs. This helps to see both you and your buyer are on the same page regarding the scope of the transaction. A clear description of services also allows your buyer to easily review and account for everything they received, reducing the chances of confusion or disputes.

6Invoice subtotal

When looking at what to include on an invoice, it’s important to include a clear subtotal. This is the total amount due before applying any taxes, discounts, or additional charges. The subtotal is calculated by adding up the cost of all goods and services provided, and helps your buyer understand the base amount they’re being charged before adjustments are made.

You can calculate the subtotal in a few different ways. If you’re creating invoices manually, simply list each product or description of services along with their individual prices, then add them up to get your subtotal. However, manual calculations can be time-consuming and prone to human error, especially if you’re handling a large volume of invoices.

To save time and help with accuracy, consider using a subtotal calculator. Many invoicing software platforms automatically calculate the subtotal for you as you input your products or services. This not only reduces the risk of miscalculations but also speeds up your invoicing process. Using a subtotal calculator is particularly helpful if you regularly deal with complex invoices involving multiple line items, varying service rates, or bulk orders.

7Taxes, fees, and discounts

Don’t forget to clearly outline any applicable taxes, fees, or discounts. Start by adding line items, meaning the individual entries on an invoice that specify a particular product, service, fee, or discount, along with its associated cost. For example, if you charge value added taxes (VAT), which are applied to goods and services at each stage of production or distribution, make sure to list it as a separate line item. This makes it easy for your customer to see exactly what portion of the total cost comes from taxes.

In addition to taxes, you should also clearly itemize any shipping fees if you’ve delivered physical goods. This helps the client understand what portion of the total cost covers the delivery. If you’re offering any discounts, such as seasonal promotions, loyalty rewards, or early payment incentives, these should also be listed as separate line items. This allows your buyer to see the original cost and how much they’re saving.

8Balance due

Another thing you’ll want to include in an invoice is what they need to pay you. From the invoice, your buyer should be able to easily understand how much they owe. Here’s what to include in an invoice:

• Balance due: This is one of the most important pieces of information on your invoice. It refers to the remaining amount your customer needs to pay after deposits, discounts, or other adjustments have been applied. To avoid misunderstandings, ensure the balance due is prominently displayed near the bottom of the invoice or in bold text.
• Amount prepaid: If your buyer has already made a deposit or partial payment, it’s important to indicate this clearly. This allows them to see how much they’ve paid and how much remains outstanding. Listing the prepaid amount also builds transparency and shows their previous payment has been properly accounted for.
• Applied discounts: If you offered any discounts, such as seasonal promotions, early payment discounts, or loyalty rewards, make sure to list them as separate line items. This shows your client exactly how much they’re saving.
• Additional costs: Any extra charges, such as value added taxes (VAT), shipping fees, or handling fees, should be clearly broken down in the invoice. This prevents confusion about why the total amount is higher than the subtotal. It also allows your customer to see exactly where their money is going.
• Invoice balance: This is the total amount your buyer was originally charged before any payments, discounts, or adjustments. The invoice balance helps the buyer understand the full value of the goods or services provided and how their payment has been adjusted.

9Invoice payment terms and details

To avoid payment delays or confusion, it’s important to clearly outline your payment terms on every invoice. This sets expectations with your customer and helps you get paid on time. Here’s what to include on an invoice when specifying payment terms and details:

• Invoice due date: This is the specific date by which the client must submit their payment. Having a clear invoice due date helps keep cash flow consistent and reduces the risk of late payments. You can use terms like Net 30, which means the buyer has 30 days from the invoice date to pay, or provide a fixed calendar date.
• Accepted payment methods: Listing your accepted payment methods makes it easy for your customer to complete their payment. These can include credit cards, bank transfers, PayPal, or even digital wallets like Apple Pay or Google Pay.
• Late payment penalties: To motivate clients to pay on time and protect your business from cash flow interruptions, it’s helpful to outline any late payment penalties upfront. Penalties can include a flat late fee, a percentage of the unpaid balance, or interest charged daily until the invoice is settled. For example, you might specify a 2% monthly interest on overdue payments.
• Currency accepted: If you work with international customers, it’s important to specify the currency in which you expect payment. If you accept multiple currencies, clarify the exchange rate or reference a standard exchange source. Without specifying the currency accepted, you risk receiving incorrect or undervalued payments.

10Explanatory notes and invoice terms and conditions

Although well-designed invoices are typically straightforward, it is generally a safe practice to add explanatory notes on anything unusual within the invoice.

For example, if certain charges are higher than expected, or if you’ve included a special discount, adding a brief note explaining these details can avoid confusion and reduce back-and-forth communication. Additionally, if the invoice covers multiple projects, services, or delivery dates, a clear explanatory note can help your buyer understand the scope of the invoice.

When deciding what to include on an invoice, you can also consider adding relevant invoice payment terms, return policies, service guarantees, or other conditions that impact the payment process. For instance, if you offer a 30-day return policy, you may want to specify how refunds or adjustments will be handled if a product is returned after payment has been made. Similarly, if your invoice payment terms include late payment penalties, it’s helpful to reiterate those terms here as a reminder to your buyer.