An invoice is a critical component of your business, as it records the transaction between you and your client.
It is a crucial document for business owners to track and measure the sales of goods or services accurately.
In this article, I will guide you on how you can create an invoice for your business.
Table of Contents
What is an invoice
An invoice is a document a business or an individual sends to a customer to request payment for goods or services.
It is a formal request for payment that shows the buyer how much they owe for the purchase.
For example, if you purchase five books from an online bookstore for N2,000 each, the store would (if they have created an invoice) send you an invoice for N10,000.
An invoice might include details about the buyer and seller, like your name, the store’s name, and address. It will also include information on the item purchased, the price, and the payment terms.
Importance of Creating an Invoice for your Businesses
Creating an invoice for your business must be considered. Here are the Benefits of creating an invoice for your business.
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Documenting sales and payments
It helps document the sale of goods or services, the amount owed, and payment terms. It can also help businesses keep track of their income and payments received.
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Payment reminder
It can serve as a reminder to customers that a payment is due. It is often used to prompt customers to make payments on time and can also be used to track a customer’s payment history and creditworthiness.
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Building and maintaining customers relationship
It can help businesses maintain relationships with their customers.
It provides customers with a tangible reminder of the goods and services they have purchased and serves as a form of communication between the business and the customer.
By sending an invoice, businesses can ensure that their customers know what they owe and when payment is due.
Necessary Elements of an Invoice
A document should contain the certain necessary information to qualify as an invoice. Here are some of them:
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Invoice number
An invoice number is an identifying number used to track invoices and should be unique. It helps keep bookkeeping organized and is often used for tax purposes.
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Date of invoice
This is the date that the Invoice was created. The customer needs to know when the Invoice was created to ensure that payment is made on time.
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Product or service
This is the name and description of the product or service being invoiced. It should provide a detailed description of the products or services, including any relevant specifications or features. The customer should clearly understand what they are being invoiced for.
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Quantity
This is the number of products or services being invoiced. The customer and the business need to ensure the correct amount is invoiced.
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Unit price
The cost of each item or service being invoiced. The customer needs to know how much they pay for each item or service.
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Total price
The total cost of all items and services being invoiced. This is important for the customer and the business to ensure the correct amount is invoiced.
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Payment terms
The payment terms are the conditions under which the customer must pay the Invoice. The customer and the business need to know when payment is due and what forms of payment are accepted.
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Billing address
The address to which the Invoice should be sent. This is important for the customer to ensure the Invoice gets to the right place.
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Shipping address (if applicable)
The address to which the products should be shipped. This is only necessary if the product is being shipped to the customer by the business.
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Tax information (if applicable)
This is important for the customer to know what taxes are being applied to their Invoice. It’s also essential for the company to make sure they are charging the proper taxes.
Read also: Online business models in Nigeria with low capital
Different ways for Creating an Invoice
Below are various ways to create an Invoice for your business:
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Use online invoicing software
There are plenty of online invoicing software programs that can help you create and send invoices quickly and easily.
This software makes it easier for you to send invoices to customers. They can be used to quickly and easily create professional invoices, track payments, and manage customer information.
Read also: 10 Effective email strategies for Nigerian Businesses.
You can also set up recurring invoices, automate payment reminders, and manage taxes.
Additionally, online invoicing software allows you to integrate with your other business systems, such as accounting and CRM software, to keep track of payments and customer information efficiently. Here are some examples of online invoicing software: QuickBooks, Bonsai, Fresh books, Zoho Books, Wave Invoicing, Zero, Sage, etc.
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Use word processor
Word processors can be used to create invoices easily. Some have an inbuilt invoice template you must fill out with the necessary information to create your Invoice.
Examples of word processors that can be used to create an invoice include Microsoft Word, Google Docs, Apple Pages, OpenOffice Writer, Zoho Writer, and LibreOffice Writer.
Let’s pick one of these word processors and see how you can easily create an invoice using the inbuilt Invoice template. We will be using Microsoft Word in this example.
To create an invoice using Microsoft Word, follow these steps:
- Open Microsoft Word, and click on “File” on the menu.
- Select “New” from the File menu. This will open a list of templates you can use to create a new document.
- In the search bar, type “invoice” and press Enter. This will show a list of invoice templates that you can use.
- Choose a template that you like and click on it to open it.
- The template will include placeholder text and formatting that you can use as a starting point for your Invoice.
- Replace the placeholder text with your company and customer information and the details of the products or services being invoiced.
- Use the formatting options in Word to customize the appearance of the Invoice, such as changing the font, adding colors or images, or adjusting the layout.
- When you are finished, save the Invoice by clicking on the “File” menu and selecting “Save” or “Save As.”
Benefits of using online invoicing software
Using online Invoice software comes with some clear benefits, and they include the following:
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Saves time
Online invoicing software makes creating and sending invoices simple and easy. You can save time by not having to manually create and send invoices and keep track of multiple customer payments.
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Professional invoices
Professional-looking invoices can build trust and help to increase customer loyalty. With online invoicing software, you can create invoices branded with your company logo and contact information.
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Automation
Automation makes it easy to keep track of payments, send payment reminders and automate other processes. Automating these tasks can help you save time and money in the long term.
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Security
Online invoicing software is often more secure than traditional methods of sending invoices. This is because the data is encrypted and stored in a secure environment.
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Integrations
Online invoicing software can easily integrate with your other business systems, such as accounting and CRM. This makes it easy to keep track of payments and customer information.
Read also: How to choose a business name in Nigeria
Some examples of online invoice generators are Invoice Generator, Invoicely, and Invoice Home.
To create an invoice using these services:
- Visit any of the online Invoice Generator websites provided above.
- Create an account with the service. This will allow you to save your invoices and access them later.
- Enter your business details, including your business name, contact information, and payment details.
- Enter the details of the customer or client you are invoicing. This can include the name and contact information of the customer.
- Enter the details of the products or services that you are invoicing for. This can include the item names, descriptions, prices, and quantity.
- Enter any additional information you need to include, such as discounts or payment terms.
- Preview the Invoice to make sure it looks correct.
- Generate the Invoice and save it as a PDF. You can then send the Invoice to the customer or client.
Conclusion
After successfully creating an invoice, It is essential to ensure that all items listed on the Invoice are accurate and that the payment amount is correct. An inaccurate invoice can lead to costly mistakes and delays in payment.
To ensure accuracy when sending an invoice to a client, it is important to double-check all the details. This includes checking that the invoice numbers are correct, that the amount due matches the quoted price, and that all taxes, discounts, and other fees are included.
It is also essential to ensure that the Invoice is sent to the correct contact, as sending it to the wrong recipient can cause delays or confusion.
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Author: Dennis Nwokah
About Author
- Op-Ed are articles published by guest authors. We no longer accept guest posts. However, we are still open to adding long-term content contributors to our team of insightful writers. To write for us, please check out inisght.ng/guest-post.
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