invoice on a laptop

Making an invoice can be very confusing. What must be included? Are invoices legally binding? Do I have to charge tax? What kind of invoice do I need?

It isn't that there is no help online; it's that there is too much. An internet search for "how to make an invoice" returns more than 85 million results – some helpful, and some… not so much.

Enter Definitive Guide to Invoicing. We talked to legal experts, studied authoritative publications, and made our own extensive independent research to make invoicing clear and simple. We also prepared 125 free professional invoice templates to give you a headstart on creating your own.

What is an invoice?

An invoice is a request for payment – a detailed bill – for goods or services rendered.

The definition, according to Black's Law Dictionary is:

invoice, n. -- An itemized list of goods or services furnished by a seller to a buyer, usually specifying the price and terms of sale; a bill of costs.

According to the Oxford Dictionary is:

invoice, n. -- a list of goods sent or services provided, with a statement of the sum due for these; a bill.

How does an invoice differ from a bill?

Both an invoice and a bill are demands for payment of goods or services but they carry slightly different connotations as you can see in these Merriam-Webster Dictionary definitions:

Bill: an itemized account of the separate cost of goods sold, services performed, or work done: invoice

invoice icon

Invoice: an itemized list of goods shipped usually specifying the price and the terms of sale: bill

The distinction between these two words is actually more a matter of custom and the business being transacted, a professional editor with expertise in etymology, lexicography and dictionary construction explained.

For example, an attorney charges for billable hours. Work that is commissioned often comes with an invoice. At a restaurant, you get a bill for items already delivered and for which payment is immediate. From a supplier, you get an invoice for goods ordered or received and for which payment is expected.

How does an invoice differ from a receipt?

An invoice is a request for payment. It is sent by a seller before a product or service has been paid for.

man holding an invoice paper

A receipt is a record of payment. It is sent by the seller after the item has been paid for as proof of purchase.

bag of groceries with a receipt

How to make an invoice

It may be hard to believe but there are no mandatory -- legal or otherwise – items that must be included on invoices. That is likely due to the fact that invoices themselves are not considered legal documents.

There are however widely accepted best practices of what to include. Those are aimed at making sure you get paid by helping your customer or client understand exactly what the bill is for. Incomplete, incorrect or unclear invoices could remain unpaid until questions about them are answered, so make sure to include:

what invoice is made of
  • The word "Invoice"
  • The name of the person or company expected to pay
  • Your name or the name of your company
  • Your logo
  • Your contact information
  • A line-item list of goods or services provided and their cost
  • An invoice number
  • The date the invoice is issued
  • Additional fees, if any (i.e. shipping costs, taxes)
  • The total amount due

A helpful way to understand why to include any of those items on your invoice is to turn the tables: imagine you are the one receiving it.

What information would you need before you could pay for goods or services?

Here are the questions you would likely ask if you received an invoice – and tips on what you can do to keep your clients or customers from asking the same questions:

invoice icon

What is this?

Put the word "invoice" at the top of the page so your customer knows immediately what he or she is looking at.

phone icon

Who sent this invoice and how can I contact them if I have a question?

Include your name or your company name, postal and email address, phone number, and any other information your customer might need to get in touch.

list icon

What am I being asked to pay for?

Include a line-item list of the goods provided or services rendered and the cost for each as earlier agreed upon.

calendar icon

When was this invoice made?

Include the date the invoice is issued.

reference number icon

If I have a question or problem, how will the seller know what invoice I am asking about?

Give each invoice a unique number so it can be easily referenced. You can number your invoices any way that makes it easy for you to keep track of them.

customer support assistant
total cost icon

What's the bottom line? How much do I owe?

Make sure the total cost is on your invoice and clear to the buyer.

credit card and cash icon

How and where can I pay this invoice?

Include details and the necessary information on how you want to be paid. For credit card payments, consider Credit Card Authorization Forms. Keep in mind, the easier you are to work with – and pay – the more return customers you will get.

person icon

Is it for me?

Make sure the name of the person or company expected to pay is on your invoice.

payment icon

Is this invoice legitimate?

Use a logo if you have one. It makes you look more professional and increases your chances of getting paid by up to 300 percent, according to due.com, an online invoicing and time-tracking company that studied 250,000 invoices and their results.

flipchart with growth graph
sandclock icon

How long do I have to pay the invoice?

Don't leave the payment due date up to your client. It's best to avoid wording like "payable on receipt" because people often misinterpret that to mean "pay whenever." Be specific. Give them a number of days they have to make the payment.

If you use the trading term Net 30-- or 10 or 15 or 60 -- (the numbers representing the number of days the client has to pay) or any of the many other payment terms, make sure you can afford to wait that many days to be paid.

What are these other charges on here?

Be clear and concise in labeling shipping, handling or other fees as well as sales tax or value added tax (VAT) if applicable.

Include a sales tax for taxable items sold to in-state buyers. It's legally required but complicated because sales tax rates as well as what is considered a taxable item vary by state and even by cities within a state.

The Marketplace Fairness Act, a bill that would change that by requiring remote (online) sellers to collect and remit sales taxes based on where their customers live , has been languishing in the U.S. House after being passed overwhelmingly by the Senate in 2013.

girl working on a laptop

Tips for getting paid more quickly

When Freshbooks looked at their data around invoice payment terms to learn which wording was best for getting paid on time, main takeaways were:

Be polite

Simply saying things such as "please pay on time" and "thank you for your business" will increase your chances of getting paid.

tip two

Be specific about
the due date

Using term like "due on receipt" often translates to "pay when you can" to many customers. A more specific "due in 21 days" or "please pay by August 3rd, 2016" is much more effective and clear.

tip three

Charge interest
for late payments

If you decide to charge interest for late payments, be polite there, too. Chose wording like, "Thank you for your business. Please process this invoice within 21 days. There will be a 1.5 percent interest charge per month on late invoices."

You can also spare yourself the headache of chasing down payments by agreeing on a time frame with your client before you even start work or provide goods. Experts agree that the invoice should be raised immediately and the payment terms agreed upon in advance.

Can I revise an invoice?

Yes. There likely will come a time when you have to correct an error you made on this first invoice. Whether you forgot to charge for something or forgot to issue a credit, you can send out a revised invoice.

Make it clear to your customer the original bill has been changed and keep your own records in order by doing these things:

  • Change "Invoice" to "Revised invoice".
  • Change the date of the revised invoice.
  • Give it the same invoice number but add an "R" at the end. For instance, invoice 2928 becomes invoice 2928R.
  • Highlight what charges have changed or have been added. You can do that by changing the color of the font, increasing the size of the font, boldfacing it or underlining it.
  • Change the "total amount due" and extend the due date if necessary.
  • Include a cover letter explaining what has changed.
revised invoice

125 Free Invoice Templates

There are many different invoicing solutions - invoicing software, online invoice makers, CRM... But if you are a small or a medium-sized company and don't issue many invoices, a simple invoice template is much easier and quicker (not to mention it's free).

settings icon

Full control of the way your document looks

word doc icon

If you already know how to work with Microsoft Office, there is no learning curve

free icon

It's free forever

Creating an invoice from scratch could take a lot of time. Making tables, aligning components, choosing right fonts and colors, creating formulas to get your data automated... That's a lot of work! Good news is, we've done all the donkey work. Our samples provide basic structure and layout, so all you have to do is fill out the blanks.

Below you will find 125 free invoice templates:

button with down arrow
38 generic blank invoice templates: neutral and
traditional, elegant and professional
(19 designs in MS Word, and 19 in Excel)
87invoice templates for specific uses

19 Blank Invoice Templates in Word

word invoices previews

Continue to see 19 Blank Invoice Templates in Word.

19 Blank Invoice Templates in EXCEL

excel invoices previews

Continue to see 19 Blank Invoice Templates in Excel.

proforma invoice example

8 Proforma Invoices

A proforma invoice, also known as a preliminary invoice, is a quotation of what the proposed goods or services will be and what they will cost. It includes all the details of the buyer and seller as well as descriptions of the goods involved in the transaction. If everything in the proforma invoice is agreed upon, the commercial invoice that will follow will be the same. If the amount or cost of the goods or services is renegotiated, the commercial invoice will reflect those changes.

Continue to see 8 Proforma Invoices Templates.

commercial invoice example

23 Commercial Invoices

A commercial invoice is what's commonly referred to as simply an invoice. Also called a sales invoice, a billing invoice or a purchase invoice, it provides all the details of the transaction between the seller and the buyer.

Continue to see 23 Commercial Invoices Templates.

freelance invoice example

8 Freelance Invoices

A freelance invoice is designed to be used by people providing work in fields such as graphic design, photography, copywriting, computer programming, website design and development, consulting, video production and translation. Although it is much like a service invoice, it offers ways to charge for services arrived at through different measures. For instance, freelancers could charge by the word, by number of images, by length of a finished product.

Continue to see 8 Freelance Invoices.

service invoice example

18 Service Invoices

A service invoice is used to bill for professional and non-professional services, such as consulting, child care or tutoring. It is not to be used when billing for tangible objects. It is useful to reflect different services that are billed at different rates or partially billed.

Continue to see 18 Service Invoices.

Packing slip example

13 Waybill Templates / Packing Slips

While technically packing slip is not an invoice, some companies use waybill as a bill or invoice since it often indicates charges to be paid. Waybill, also known as packing slip, delivery note, shipping list, or a packing list is a document which identifies the contents of the package.

Continue to see 13 Packing Slips.

Travel Bill Example

3 Travel bills

TRAVEL INVOICE can refer to a Service Invoice template for travel industry, or to an Expense Report. Our page offers invoice templates specially designed for travel agencies.

Continue to see 3 Travel Bills.

Roofing Invoice Example

4 Roofing Invoices

These are invoices for the roofing industry, and they allow for goods and services to be billed on the same invoice.

Continue to see 4 Roofing Invoices.

Rent Receipt Example

10 Rent Receipts

A rent receipt, also called a rental invoice, is given by a landlord to a tenant as a record of rent received. Although not legally required in every state, it is a good idea to provide one in case a dispute arises.

Continue to see 10 Rent Receipts.