How to create an invoice: a step-by-step guide

If your business relies on invoices as a primary method of payment, it's important to get them right.

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An invoice that’s easy to pay shows professionalism and encourages customers to work with you again. On the other hand, unclear or inaccurate invoices confuse recipients and delay payment. 

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Luckily, it’s easy to create a professional invoice once you know what one looks like. In this guide, we'll walk through how to write an invoice and share tips on how to issue them so that you get paid on time.

We've also included an invoice template that you can download and use as a reference for your own business. ‍

What is an invoice?

An invoice is a document used to inform customers that payment is due. Aside from helping you get paid, an invoice also serves as a record so that your business can track accounts receivables. These records are also important to keep in the event that you get audited and need to provide proof of business income to the IRS.

How to create an invoice

Here's a step-by-step guide to creating your own invoice, using the example here as a reference.

You can also use Ramp's invoice generator to generate invoices automatically, or download a sample invoice here.

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1. Include your company information

Start by adding the following information to the top of your invoice: 

• Your company’s name, address, and contact information
• Your customer’s name, business name, and address
• Name, phone number, and email address of your point of contact with the client

Include your business logo in your header and change the colors and fonts to match your brand—these small touches make your invoice design look more professional and help you maintain consistency across your communications with customers.

2. Name your invoice

Include "Invoice" in your document's file name and the invoice itself so that the receiving business can easily identify it as such. Also be sure to include "invoice" in your email subject line.

‍3. Include an invoice ID

It's a good idea to include a unique invoice number to help you organize and identify your invoices, especially if you bill a client on a regular basis.

The easiest way to label your invoices is numerically (e.g., starting with #0001 and working your way up), but an alphanumeric code works well too. The important thing is to remain consistent with your labeling scheme. 

4. Date your invoice

Enter the invoice date and the payment due date. The invoice date reminds the recipient of when the work was completed or the items delivered. If your business works on net-30 payment terms or something similar, this date also indicates the start of that period. 

3. Provide an itemized list of goods and services

This section lists exactly what your client is paying for. Without this list, a recipient who’s unsure about the fee breakdown may refuse to pay the invoice without additional clarification—which in turn can delay payment.

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Your invoice should include the following for each line item:  

• The service or product provided
• Number of hours worked or items delivered
• Hourly rate or price per item (if applicable)

Brief descriptions of each line item offer additional clarity into the project scope and cost. For example, a marketing agency or freelancer may decide to break up their monthly retainer fee into specifics like “20 post captions for Instagram” and “Facebook ad management for July 2022.”

4. Calculate fees and the total amount due

If you plan to include service charges, fees, sales tax, or discounts on your invoice, break them out into separate line items as well.

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After adding your subtotal and fees together, list the total amount near the bottom of the invoice. Ideally, you want this number to be displayed prominently—so use bold text or increase the font size so the total is easily found. 

5. Include payment terms and notes

Here, outline the process your client or customer should follow to pay the invoice and any penalties for late payments. You both should’ve already agreed to payment terms as part of your vendor negotiations, so this section serves as a reminder of that. 

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This is also a great place to add a personal note for the recipient—thanking your customers goes a long way. You may also want to include other details here, such as:

• Warranties or money-back guarantees
• Returns and exchange policies
• Information on your referral program
• Updates on upcoming sales or promotions

6. Double-check information before sending

Mistakes on your invoices can delay payment and make you look unprofessional. So before you send out each one, take a few minutes to confirm all of the information is correct. 

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To help you catch formatting errors, review the document the way your client would. So if you’re creating an invoice on Canva but sending it as a PDF, open up the actual file so you’ll know what your client will see when they receive it.

Invoicing best practices for timely payments

Your ability to collect payments owed to your business in a timely fashion can be the difference between your company flourishing or struggling to make ends meet. Fortunately, there are some best practices you can follow to increase your likelihood of getting paid quickly and correctly.

Invoice as soon as possible

Some small business owners create and send out invoices once a week or at the end of the month to save time. However, that can create some serious cash flow issues—particularly if you find your company strapped for cash between invoice batches. 

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Plus, if too much time has passed between when you delivered on your contract and when you invoice for it, your client may have forgotten about your agreement entirely. 

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To avoid this, send invoices as soon as the engagement has ended. This ensures you get paid sooner rather than later (or not at all).  

Offer multiple ways to pay

Providing customers with different payment methods gives them greater flexibility, positions you as easy to work with, and gets you paid faster. 

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Traditionally, businesses have paid invoices with paper checks or bank transfers. Today, companies have expanded their list of payment options with alternatives like credit cards, PayPal, Stripe, and even Apple Pay. 

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Sure, you might pay a small percentage in processing fees, but the quick delivery of funds and real-time notifications offered by these methods may be well worth the cost. 

Take advantage of free invoice templates and invoice generators

To save time typing out the same information for each new invoice, create a template with the invoice details outlined above already filled in.

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Free templates in a variety of formats (Google Docs, Microsoft Word, etc.) are just a quick Google search away. You can also use our free invoice generator to create your own custom invoice in minutes.

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Whatever method you choose, just make sure to send your invoice as a PDF file to prevent someone from editing the information on it. Also, keep a copy of the document for your records, as well as for invoice reconciliation and potential tax audits. 

Look into invoicing software

Compared to templates and online invoice generators, invoicing software offers many more tools that streamline and simplify your invoicing process.

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In addition to customizable invoice templates, you can set up features like automatic payment reminders and late payment penalties. The software then follows up on overdue invoices on your behalf, and automatically adds late fees to the bill once your conditions have been met. Plus, you can access past invoices at any time and review reports for greater visibility into the health of your business. 

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To keep costs down, consider looking into accounting software like QuickBooks or Xero that come with invoicing features (and much more) already built in. 

Simplify the way you process invoices with Ramp

‍Invoicing and billing shouldn't take hours out of your day.

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Ramp's accounts payable software helps you cut down on the time you spend on your vendor invoicing process. Our tool automates your invoicing workflow so you can spend more time on the work that matters, but with the reassurance that your finances are protected every step of the way. 

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Our AI-powered software logs the details from each invoice with 99.9% accuracy and gets approval from the right people to ensure timely payments. With Ramp, you can also take advantage of our expense management tools, account automation, and 1.5% cash back with our corporate card. 

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Take a tour and see how Ramp can streamline your invoice processing.