How to write the perfect invoice

By Published On: August 28th, 2018Categories: New to contracting, Running your business

If you decide to work as an independent contractor, one of the tasks you will need to familiarise yourself with is the preparation and issuing of invoices for the services you have provided.

Ensuring the invoice contains all the necessary information will make it easier for your client or agency to action payment.

Female sitting in front of a calculator and an invoice

If you’ve never had to issue an invoice before or have forgotten how to do it, here is a checklist on what should be included on a contractor invoice.

Top things to remember when writing an invoice:

  1. At the top of the document clearly show the word ‘Invoice’. It may seem like an obvious thing to put, but the accounts department could be handling hundreds of invoices each week and without clearly showing it is an invoice it could be missed or ignored.
  2. A unique invoice number. It is entirely up to you what you use. Most contractors choose to use a combination of letters and numbers. It is probably a good idea to avoid putting 001. This is very generic and if you do have to contact the accounts department for any reason, it will be easier for them to find your invoice if the invoice number is unique.
  3. Add the date that the invoice was issued.
  4. Details of your limited company. This includes the company’s name, company number, registered office address, where the company was registered, contact telephone and email address.
  5. Your company logo. This can portray a more professional image, but it isn’t compulsory to include this.
  6. Details of the client/agency. Their name, address and email address.
  7. VAT registration number (if you are registered for VAT): Include this under your limited company address.
  8. A detailed description of the services you have provided.
  9. Breakdown of the services in units: If you work a set number of hours each week, this should be detailed as; 40 hours x £100 p/h.
  10. Detail the period when the services were provided: e.g. IT Consultancy – 23rd July – 27th
  11. The total amount charged.
  12. The total amount charged plus VAT (if applicable)
  13. Payment details: These details relate to your business bank account. You need to include the name the account is in, sort code and account number.

An extra piece of information you could include on the invoice is your payment terms and fees you may apply for late payment.

Your client may also instruct you to add their PO (Purchase Order) number on the invoice and without it they may not be able to pay your invoice. We recommend that you check with your client or agency at the start to see if they need a PO number added to the invoice.

How to prepare an invoice

What method you use to prepare an invoice is up to you. There are plenty of templates on the web that allow you to add your own details.

Computer displaying an invoice created by FreeAgent

FreeAgent is all-in-one accountancy software that can sort invoicing for you too.

If you are looking for a more streamlined process, you could invest in an accounting software that enables you to prepare and send invoices electronically.

Accounting software will cut down the time spent on preparing invoices as most allow you to create recurring invoices – great if you are working on a long-term contract with a client.

Need a hand? We can help

We offer a range of accounting packages to suit your needs. Contact us on 01962 867550 to arrange an initial face to face meeting and to find out more about the services we offer to contractors.

Note: All the information and advice in this blog post was correct at the time of writing.

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