How to write an invoice: what to include, payment terms and an example

What an invoice must include

An invoice is a request for payment, and it's also a record for you, your client and the tax office. Whatever you sell, a clear invoice has the same parts:

If you're VAT-registered in the UK, or charge sales tax elsewhere, the rules ask for more: usually your VAT number, the tax rate and the amount of tax on each item or on the invoice. A limited company should use its full registered name. Check your own tax office's guidance, as the rules vary from country to country.

Writing an invoice, step by step

1. Set up your business details once. Name, address, email, tax number and how to pay you. These go on every invoice, so get them right at the start.
2. Add your client. Use the exact name and address they want on the invoice. Larger companies sometimes give you a purchase order (PO) number: put it in the notes.
3. Give it the next number and today's date. Then set the due date from your payment terms.
4. List the work. One line per item or task, in words your client will recognise: "Homepage design, 12 hours" beats "Design work".
5. Add discount and tax. Discounts usually come off before tax. Only add tax if you're registered to charge it.
6. Say how to pay. Bank details, a payment link, or both. Ask them to use the invoice number as the reference.
7. Check, save as PDF and send. Read the totals once more, export a PDF, and email it to the person who pays, not only the person you worked with.

Invoice numbers that stay tidy

Every invoice needs its own number, and the numbers should follow on from each other. That's how you, your client and your accountant refer to it, and how tax offices check nothing is missing.

• Pick a format and keep it. INV-0001, INV-0002 is simple. Some people add the year, such as 2026-014.
• Never reuse a number. If an invoice is wrong, send a corrected one or a credit note, and keep the old one in your records.
• Use a separate prefix per business if you run more than one, so the sequences don't clash.
• Don't start at 1 if you'd rather not. Starting at 0100 is fine, as long as each number after it goes up.

Payment terms: due dates that get paid

Payment terms tell your client when to pay. Write them on the invoice as a date, not just a phrase, so there's no room for doubt.

Agree the terms before you start work, ideally in a quote or contract, so the invoice holds no surprises. In the UK, businesses invoicing other businesses can usually claim statutory interest and compensation on late payment, but most freelancers find a polite reminder works first.

A worked invoice

Notice the order: the discount comes off the subtotal, then tax is worked out on what's left. If you aren't VAT-registered, leave the tax line off and the total is £765.

Making invoices on a phone

Invoice is a free invoice generator that runs in your browser and keeps everything on your device. Here's how the steps above map onto it:

• Business details once. In Settings, add your business name, address, email, phone, tax number, an invoice prefix, a payment link and "how to pay you". Every invoice and quote uses them.
• Clients have their own currency, hourly rate and tax number, so a US client is billed in dollars while your totals show in your base currency, at rates you set.
• Numbering is automatic from your prefix (INV- by default), and the due date comes from one tap on On receipt, Net 7, Net 14 or Net 30.
• Discount and tax take a percentage or a fixed discount and a tax %, rounded to the currency's decimals. A live preview shows the invoice as you type.
• Add time turns hours tracked in Hours into lines at the client's rate.
• Export PDF gives a clean A4 or Letter page with no watermark. Add a payment link and the invoice can show a pay-me QR code.
• Mark as sent, then Mark paid when the money lands. Paid invoices count as income for Budget and your profit and loss.

Quotes work the same way, with optional plain-English contract terms, and an agreed quote becomes a draft invoice in one tap. Clients, quotes, invoices, PDF export and profit and loss are free with no sign-up. Invoice Pro ($4.99 once) adds your logo, repeating invoices, payment reminders and more than one business.

When an invoice is late

Most late payments are forgotten emails, not refusals. A calm routine gets most of them paid:

1. A day or two after the due date, send a friendly reminder with the invoice number, the amount, the due date and how to pay. Attach the PDF again.
2. About a week later, follow up politely but firmly, and ask when it will be paid.
3. After that, phone the person who handles payments, and say what happens next, such as pausing work or adding late payment interest if your terms allow it.

In Invoice, overdue invoices appear under Needs chasing, and Invoice Pro writes the reminder for you in a friendly, polite or final tone.

Common invoicing mistakes

• No due date. "Payment appreciated" isn't a deadline. Write a date.
• Vague line items. "Work as discussed" invites questions and delays. Say what you did.
• Sending it to the wrong person. Ask who pays invoices, and whether they need a PO number.
• Charging VAT when you aren't registered, or forgetting it when you are.
• Reusing or skipping numbers. Keep one sequence and never go back.
• Waiting to invoice. Send it when the work is done, while it's fresh in your client's mind.
• Not keeping a copy. You'll need every invoice for your tax return.