- Bill vs. Invoice
- What information to add to an invoice
- Invoicing software
- Top invoice designs for your inspiration
If your company is transitioning into a global business, it’s important that you know what documents are used in international trading. In this post, we’ll talk about an invoice and how to correctly make one.
Bill vs. Invoice
Both a payment check and invoice have to do with paying for goods or services. However, few entrepreneurs can tell the difference between the two documents. Although both a payment check and invoice indicate the cost of a sales proposal, they pursue different purposes. Let’s draw a line of distinction between a payment check and invoice once for all.
A payment check allows you to keep track of incoming and outgoing payments for the purpose of calculating VAT (value added tax). The amount of VAT (in %) is calculated based on the net profit from a product or service. VAT is then added to the original price of a product or service. Basically, VAT is paid by none other than a customer. The more counterparts are involved into trading relations and the bigger the assortment of products and services, the more difficult it becomes to calculate taxes. The problem is that a payment check can’t be used in certain situations. This is when an invoice comes into play.
An invoice is a document that regulates the trading relationships between a seller and a buyer. It contains written arrangements between the counterparts, allowing them to avoid possible complaints and swindles. If you make a deal without an invoice, you won’t be able to prove any violations by your counterpart in court.
The need for invoices was born out of the standards of international trading. Nowadays, companies are not allowed to export goods without an invoice. It’s a compulsory document that must be shown at customs control.
Making an invoice is an extremely responsible task. What information your invoice contains depends on whether you’re selling in a domestic or international market. In situations when you can’t determine the terms of supply or payment in advance, it makes sense to use an invoice proforma which serves as a draft document. As the situation is becoming more clear, you’ll be able to make changes and adjustments to your invoice proforma.
What information to add to an invoice
To perform its functions properly, an invoice must have a clear structure and contain all the information required for your type of deal.
1. Company name
Your company name is an indispensable piece of information in both internal and tax reports. By adding your business name to an invoice, you’re positioning yourself as a professional and highlighting your weight. All this enhances your status in the eyes of your customers.
Be sure to put your corporate logo on your invoices. Like with a business name, this will boost your company image and make you look more reliable. Plus, a corporate logo on your documents contributes to your company recognition. Don’t have a logo yet? Check out the Logaster logo maker and get yourself an amazing corporate design in just 10 minutes!
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3. Seller’s contacts
Don’t forget to include your contact information: phone number, physical address, email, etc. This way, if a buyer has questions concerning the deal, they will be able to get in touch with you. Also, if a customer chooses to work with you again in the future, your contacts will come in very handy.
4. Invoice number
Remember that each invoice must have a unique number. A smart way to avoid confusion is to add letters, i.e. initials of a buyer, first letter of the company name, etc. The number will help you find the right invoice in seconds and track its status.
5. Payment date
Issuing an invoice is only half a battle won. The main thing to get money for the supplied good and/or rendered services. To get paid in time, you need to set the payment due date. This way, the customer will know exactly when the payment is due. Another important piece of information is a list of acceptable payment methods. If you arranged for a delayed payment, be sure to set up an online notification for the customer.
6. Customer’s contacts
Since an invoice ensures the fairness and integrity of a deal, it must contain the contact information of the buyer as well. Make sure your invoice includes the relevant data about your customer (name, company name, phone number, physical address, and email).
7. Information on products/services
To avoid misunderstandings with the customer, be sure to give a detailed description of the product or service you’re selling. Otherwise, customers might claim discounts or other forms of compensation because the purchased product hadn’t met their expectations. Anyway, you’ll be the one to blame.
8. Sales tax
Don’t forget to include the amount of sales tax into your invoice. Depending on your industry and range of goods/services, the way a sales tax is calculated may differ greatly. This is why we strongly recommend you to study this issue. Consult a tax specialist or use an invoicing app.
If you provide a discount on your product or service, it’s a good idea to make it a part of your invoice. A discount can be expressed either as a percentage of the original price, or as amount in dollars/euros/etc.
It may seem that making an invoice is a strenuous task which is beyond your abilities. Don’t give up just yet! There is a bunch of tools that can help you create a professional invoice hassle-free.
Invoice2go is an one-in-all tool for creating beautiful invoices in any place and at any time. Apps for both iOS and Android are available for download. The software allows to create invoices, track expenses, send notifications, build a customer base, create performance reports, and many more. Users can benefit from professional invoice templates and brand them with their corporate identity.
Price: 4.99$ to 39.99$ / a month, depending on the selected plan
Square Invoices boasts a vast gallery of templates for every document a business might need. You can create an invoice and monitor its status, track your expenses, calculate discounts in one click, set payment due dates, schedule payments, etc. Download the app to your smartphone to have access to your invoices 24/7!
Price: 2.9% of the deal amount + 30 cents for each paid invoice.
If you don’t have an account with Google Docs, we strongly recommend you to create one now. This platform offers a good selection of templates for business documents. Go to the section with templates and search for invoices. Pick the template that meets your needs and fill it out with the appropriate information!
Thinking that Microsoft Word is only good for working with text is a big misconception. This all-familiar tool has a vast functionality and is successfully used for creating invoices. While not as powerful as dedicated invoice makers, Microsoft has everything you need to set up a professional invoice. Click the “Invoice” tab and pick the right template!
Microsoft Excel is another quick way for setting up an effective invoice. The program offers a wide range of simple and easy-to-edit templates for the main business documents. Navigating Microsoft Excel is very similar to navigating Microsoft Word. Select the “Invoice” tab, pick the template that fits your deal, and add the necessary information. Easy, right?
If you have a small business with up to 12 employees, take advantage of the free version of Bitrix24! This advanced tool offers a bunch of fully customizable invoice templates. You can even personalize your invoice with your corporate brand. In addition, Bitrix24 can help you handle other business tasks. Use this software to create and manage a customer base, store documents in cloud, optimize your work schedule, set up a portal, etc.
Price: 99$ for an unlimited number of users.
If you need a narrow-use program designed exclusively for generating simple invoices, you can’t do better than Invoice Generator. It’s a free tool that allows you to create, send and print out an unlimited number of invoices. Since the program has very few functions, it’s extremely easy to use. Filling out an invoice template takes just a few clicks!
Top invoice designs for your inspiration
If you’re convinced that documents and creativity don’t mix well together, let us persuade you otherwise! Take a look at the invoices where digits and accounting terms go hand in hand with an original and memorable design. We hope these beautiful invoices will inspire you to create one of your own!
With smart technologies, managing documents has become notably easier. Nowadays, online tools can take a big chunk of work off your hands, giving you the opportunity to focus on more challenging and creative tasks. If you value your time, you should trust your invoices to one of the clever invoice makers we’ve covered in this post!