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

If you’re a small business owner or sole proprietor, you rely on invoices as a primary payment method. According to the "2025 Intuit QuickBooks Small Business Late Payments Report," 56% of small businesses have late payments owed to them. An invoice that’s clear, professional, and easy to pay goes a long way toward ensuring timely payment.

However, if you’re just getting started, you may not know how to format the invoice, which details to include, or tools to help with invoice creation. Luckily, it’s easy to create a professional invoice once you know what one looks like.

What is an invoice?

An invoice is a formal document used to request payment for goods or services. In addition to helping you get paid, invoices serve as critical business records for tax purposes, financial reporting, and tracking accounts receivable.

More specifically, the purpose of invoices in businesses is to:

• Request payment for goods or services
• Provide details on the goods or services purchased
• Define payment terms
• Establish a written and legally binding account of the transaction

They're also essential for proper recordkeeping and ensuring timely payments:

• Financial management: Invoices allow you to track both incoming and outgoing payments
• Tax reporting: They provide documentation for taxes or potential audits
• Cash flow: Invoices help you project when you'll receive income, so you can budget your cash accordingly
• Resolution management: If there’s ever a dispute with a customer, an invoice serves as the source of truth, documenting the transaction

Free invoice template and generator

We'll cover the step-by-step process for how to create an invoice from scratch, but you can also use Ramp's free invoice generator to generate invoices automatically.

When using a template, it's useful to add custom elements like your branding, logos, fonts, colors, custom headers, and personalized messaging.

How to make an invoice: Step by step

Step 1: Add your business and client information

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

• Your business information: Company name, address, and contact information
• Your customer’s information: Client name and point of contact, address, and contact information

Accuracy matters for both you and your customer. Starting with the correct information helps your invoice get into the right hands for timely payment and tax and recordkeeping purposes.

Step 2: Pick an invoice title or label

Include a title at the top of your document to make it clear to the receiving party what it is and what it's for. Use labels such as Invoice, Tax Invoice, or something more specific, such as Consulting Invoice. Clarity is key to ensuring it gets into the proper process workflow.

Step 3: Assign a unique invoice number

Include a unique invoice number to help you identify and organize your invoices, especially if you bill clients regularly.

The easiest way to label your invoices is numerically, starting with #0001 and working your way up, but an alphanumeric code works, too. The key is to maintain consistency.

Invoice numbers help avoid confusion and serve as a way to track your billing history should a dispute come up.

Step 4: Mark the invoice and due dates

Enter the invoice date and the payment due date. The invoice date reminds the recipient about when you completed the work or delivered the items.

Depending on your business and industry, typical payment terms could be net 15, net 30, or due on receipt. The invoice date indicates the first day of that cycle.

Step 5: Detail goods or services and pricing

Itemize the goods or services purchased into a clearly organized list so your client understands what they're paying for. Without this itemized list, the recipient may refuse to pay the invoice without additional clarification, which can delay payment.

Your invoice should include the following details 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 help clarify the project scope and cost. Try to make them as clear and concise as possible, and group related items.

For example, a marketing agency may break down their monthly retainer fee into specifics like “20 post captions for Instagram” and “Facebook ad management for July 2025.”

Step 6: Factor in fees, taxes, and discounts

Add applicable taxes, service charges, fees, or discounts to your invoice, and break them out into separate line items.

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

Depending on the jurisdiction, you may need to add your tax ID or business registration numbers for some invoices. If you’re unsure, check with your accountant or a legal expert to confirm you’re including the necessary info.

Step 7: Outline payment terms

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 negotiations, so this section serves as a reminder.

Your accepted payment options might include:

• Bank account transfer
• Credit card
• Online payment systems like PayPal

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:

• Policies on late fees or penalties
• Early payment discounts
• Warranties or money-back guarantees
• Returns and exchange policies
• Updates on upcoming sales or promotions

Step 8: Double-check and send

Before sending out each invoice, take a few minutes to confirm that all the information is correct. Mistakes on your invoices can delay payment and make you look unprofessional. Check for accuracy and client information, and confirm you’ve attached all the correct documents.

Once you’ve verified the invoice is correct, you can email it to your point of contact, submit it via invoice software or your client's vendor portal, or print and mail it.

If you’re having trouble with overdue payments, remember to follow up. You can set automated reminders before and after the due date. But the best way to follow up is often with a quick phone call or direct email as a reminder.

Invoicing best practices for timely payments

Your ability to collect timely payments owed to your business begins with how you manage and present your invoices. Fortunately, there are some invoicing best practices you can follow to increase the likelihood of faster payments:

• Use consistent branding and professional design: A clean and polished invoice template sets a professional tone, which can encourage more timely payments. Whenever you send an invoice, view it as an extension of your brand, including company logos, colors, and a consistent design.
• Set clear payment terms and communicate them up front: Before starting work with a client or vendor, clearly communicate the payment terms, such as due on receipt or net 30. Reiterate those terms on each invoice you send.
• Automate reminders and follow-ups: Use invoicing software to set up automated notifications a few days before an invoice is due, on the due date, and once it’s overdue. The tone of your follow-ups should be friendly, yet firm, to enforce the need for payment.
• Keep records organized for tax and accounting purposes: Invoices provide a written record both of your billing communications and for tax purposes. Organize your documents so they’re easily accessible should you need them for a potential audit.

Benefits of using an invoice generator or template

Using an invoice generator or template for invoice creation will save you time and reduce errors. It’s far more efficient to use a template that prefills your company name and other information and automates your payment calculations.

Manual invoice creation also risks errors such as miscalculations, typos, or other incorrect information. Getting the facts straight leads to fewer disputes and quicker payments.

When considering invoice tools, look for these features:

• Auto-calculation
• Recurring invoice creation
• Easy customization
• Payment integrations
• Reporting
• Mobile access
• Integrations with accounting or other existing software

Here’s a breakdown of the major differences between manual and automated invoicing:

Ramp has its own free invoice generator to help you create invoices quickly and accurately. Fill in the relevant fields and customize with your company branding and logo. Within seconds, you can produce a PDF invoice ready to send to your customer.

Process invoices in seconds, not hours, with Ramp Bill Pay

Ramp Bill Pay makes invoice management fast, accurate, and stress-free. Once you’re set up, you can:

• Get started quickly: Apply online and connect your accounting system and bank in minutes
• Upload invoices with ease: Bulk upload bills and manage them all in one place
• Automate approvals and payments: Save time with built-in workflows and auto-pay options
• Track everything in real time: Get instant visibility into payment status through the Ramp Vendor Portal

With Ramp’s invoice management software, you can cut hours of manual work down to seconds to focus on running your business, not chasing payments.