Wednesday 27 January 2021
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What To Do When Your Business Needs To Create An Invoice?

When you have a business that sells items or products to your customers, you will need to issue invoices. An invoice is compulsory for accounting purpose of your business. Create a professional looking invoice. The first step is to put together your invoice. One traditional way is to create a template on a spreadsheet such as Microsoft Excel. A better way is actually when your company has purchased a profession accounting/bookkeeping software that is also installed on your computer, you should use the software. The best way nowadays is to make use of cloud-based app/tool such as Xero accounting software.

Mark your invoice clearly. A properly created invoice needs to have a unique identification number. This way, it allows for good record keeping. Actually you should always have a reference of all the numbers you have ever used. This prevents from creating duplicates. Use a sequence of numbers that increases. For example start with a number such as A0001, and increase through A0002, A0003, etc. You may use a letter in front of some numbers to indicate a specific client. At the very least, include your company name, contact person name, and contact information (including office phone number, email, store address, etc). You should also include a date on each invoice you are issuing to your customers.

It is always a good practice to include certain information of the purchased item/product on the invoice, such as the name of the product, and simple description, along with the unit price of the specific product. All these information form a single row on the invoice. When the customer purchases multiple items/products, you will list each product on a separate row, with a sub total amount at the very end of the invoice. If there is a value-added tax (VAT) amount, then you should add this figure to the sub total for accounting purpose. Depending on the nature of your business and/or products, on each row’s line item, you may have to specify the quantity of each product.

As a good practice for invoicing, mention the payment terms. You should have agreed on all these payment terms with the customer beforehand. Also mention the methods in which your customer could make the payment. You should include several different direct payment methods such as company bank account transfer, PayPal, Stripe, Check, etc. To enable recurring payments, you would configure to have an invoice with the right monetary amount automatically sent to your customers each month (or on whatever agreed payment terms) through your choice of cloud based accounting app (such as Xero).