What Makes an Invoice?
An invoice is an accounting and bookkeeping document used as a request for payment of goods. It is prepared by the seller and sent to the buyer. But many people take an invoice for just a simple document. Well, the fact is that an invoice is a structured document that may even be produced in a court of law. Today, we want to look at the most critical information that a good invoice template design should capture.
✉️ Business name and address
The first important thing is your business name, and most importantly, contact details and address. The invoice should also be explicitly addressed to the buyer’s business name as well as the address and contacts.
📅 Transaction dates and Invoice ID
The second information is the date when the transactions took place. Here, mention the purchase date and if possible when the goods were delivered. It’s important to note that sometimes, the products may be delivered before or after the date the invoice was generated. It is also desirable to have an invoice ID system, for example, invoice number.
📦 Goods and services rendered
Now comes the most important part which bears all the information regarding the products or services delivered. It’s imperative that you make a breakdown of whatever goods or services you provided. Don’t just bill them a lump sum amount without accountability. Make sure the information is as precise and straightforward as possible. You don’t want to lose your money or the customer’s trust in case you surcharge them.
📃 Terms & Conditions
Lastly, you need some Terms & Conditions. Somewhere on the footer of the invoice, find a place to include the terms. This includes all the incentives and punitive measures that result from either early or late payment. Of importance is the deadline for the payments to be made.
When choosing an invoice template or designing one, make sure you capture all the information above. You don’t want excuses for late payment because of inadequate or inaccurate payment information from your business’ side.
Tips for Utilizing Free Invoice Templates
To save time and for the sake of efficiency, a lot of companies like to take advantage of the free templates that are available for creating invoices. These can be most convenient and great time savers. There are a few things to keep in mind when using them.
Once you have decided on which template to use, it is important to keep using the same ones. This way it helps to build your brand. Customers will quickly recognize your invoices. But, if you tend to use different templates each time you create an invoice they can become confusing not only for your accounting department but for clients as well.
The template you choose for your invoicing should have some flexibility. It should allow you to be able to customize it, so you can add your company logo and information to it.
📆 Choose A Template for Now and the Future
Business requirements change as the company grows. Make sure that if you choose to use a simple invoice template now that it is going to allow it to become more complex in the future if the need arises.
You will need to know how you will be able to deliver your invoices as well as store them. There are many different resources online that will offer you free invoice templates to use. You need to research them carefully to determine how you will be able to deliver the completed invoices to your clients. Will you be able to deliver them directly from the program you are using? Or, do you need to download them first before they can be delivered? Also, is the data that you are creating in your invoices being stored in the cloud? Or have you opted to use downloads templates that will be stored in your system?
Important Differences on State Invoices
Those individuals that are operating businesses in the United States must commit to following both the Federal Regulations, as well as the State rules, where their company is headquartered. Many different documents are created in a business setting, one of which is the company’s invoices. Some regulations pertain to these.
Invoice Federal Regulations
There are no definite rules or regulations that apply to invoicing overall. However, there are accounting rules that are applied to this specific type of document. An invoice is a form of contract between a business and their client. The requirements for an invoice will also depend on where you may be shipping the product to.
Invoice State Regulations
The invoice has to clearly define as many details about the transaction it pertains to as possible. This includes how much money has to be paid as specified on the invoice. The biggest difference that will appear on invoices, according to the various states, will be the amount owed for the state tax if it is applicable.
The confusion that can sometimes come with state taxes is, who is responsible for paying the tax. Also, which state tax should be applied to the goods or services listed on the invoice. The general rule is that the seller charges the sales tax to the buyer. It is the sales tax that applies to the state in which the goods were sold and delivered that would be applicable.
The collection of taxes can be complicated for businesses that are shipping outside of their jurisdiction. Therefore, it is entirely their responsibility to ensure they understand the governing rules about this.
There may be additional taxes that are applicable at a local level as well, and these may have to be considered and included on the invoice.