In every business, there is endless paperwork — emails, spreadsheets, bills, taxes. One crucial piece of documentation is invoicing, which, according to a HubSpot study, is a struggle for over a quarter of small business owners. We understand if you’ve got a love-hate relationship with invoices.
So maybe you're wondering, “How do I make my own invoices?” or perhaps you've got a system in place but want to improve it. We've got you covered. We explain why invoices are important, how to write your own invoices and highlight some easy-to-use and budget-friendly small business invoice software.
What Is an Invoice and Why You Should Get in the Habit of Doing Them
The invoice is a written agreement between you and your customer about a good/service transaction. This type of document plays a crucial role in your small business bookkeeping and accounting. While you aren’t legally required to give invoices, they can help if you ever find yourself in a tricky situation where a customer is not paying up. In fact, Fundbox found that the average small business has $84,000 in unpaid invoices.
When invoices are done professionally and tracked on a timely basis, your business has better financial health.
How Do You Write a Business Invoice?
An invoice isn’t just a piece of paper recording a transaction; it also helps you get paid on time and therefore keeps your cash flow in the green. Follow these simple steps and get your invoicing done right, every time.
Gather the Important Elements to Include
The first step in DIY invoicing starts with ensuring you have all the information required for building an invoice. Here’s a simple checklist of items you need to have handy for every invoice.
▢ Your company’s legal name and contact details
▢ Client’s name and address
▢ Invoice number
▢ Invoice issue date
▢ Payment amount
▢ Payment due date
▢ Payment terms (30/60/90 days)
▢ Appropriate tax numbers
▢ Itemized list of goods purchased or services provided (including tax rates, shipping, packaging charges)
▢ Preferred payment method
Create an Invoice Template
Having a professional-looking invoice can make a world of difference to your clients. They are likely to take your business more seriously and pay faster (yay!). Luckily, there are plenty of free invoice templates that you can use and customize.
Creating an Invoice with Google Docs, Microsoft Word or Excel
Google Docs provides an easy-to-share method for invoicing. Here’s how to create your own invoice from scratch.
- Go to your Google Drive and click on the “+New” icon.
- Select the template option from the drop-down menu.
- Search “invoice” in the template bar and select your option
- Customize the template with your company’s name, logo and brand colors.
- Input invoice details and send them immediately via the "Share" option.
Microsoft Word and Excel also offer a variety of invoice templates. You can search for invoice templates under "New" in the File menu. The only drawback with creating invoices via Microsoft Word or Excel is that you have to manually attach the file to an email and follow up on that.
Start an Invoice Tracking System
Delivering and tracking invoices can be cumbersome. Creating an invoice tracking system will help you check on payments and tackle any overdue ones.
Details to include in a tracking system include:
- The date you sent your invoice
- Whom you sent the invoice to
- If/when the invoice was paid
- How much you received as payment (if they're paying in stages)
This Microsoft Excel template can help you get started.
Schedule a day of the week or month (depending on your business) to send out all the invoices. This will let your customers know when to expect an invoice from you and minimize the chances of your invoice getting overlooked. Similarly, you should also set a day for following up on payments.
Small Business Invoicing Software and Generators
Creating and sending invoices can quickly becoming a handful, especially when you consider the follow-ups you have to do to ensure payment. A BigSugar Invoice Survey reports that it takes 44 percent of small businesses a week or longer to do invoices.
Time is money; therefore, we recommend investing in invoicing generators or software that will enable you to automate the process, allowing you to focus on other areas of your business.
Pricing for these invoicing generators and software starts between $9/month to $50/month, though most offer free invoicing for the first few customers or free trials.
Here are some of the top small business invoice software and generators:
This is a comprehensive and easy-to-use platform that not only lets you send customized templates but also sends automatic payment emails to clients. Zoho's pricing is ideal for small businesses (free for up to five customers) and it easily integrates with other Zoho offerings like Zoho Books and CRM.
This invoice generator allows you to send unlimited invoices to 100 clients for free (upgrade plans start $10/month). Invoice Ninja's key features include invoice tracking and the ability to ask customers to pay a deposit upfront and add discounts to invoices.
Used by over 65,000 small businesses, especially freelancers and solopreneurs, Hiveage is ideal for those who work with five clients (upgrade at $16/month). The Hiveage dashboard is easy to use and even offers time, mileage and expense tracking.
Wave is actually an all-in-one business accounting software that allows you to generate invoices, track them, accept payments and even consolidate them with your bank statement. The best part about Wave is that you can access all of these features for free.
Square Invoices allows you to create custom professional-looking invoices you can email to your customers. The system tracks payment status, sets reminders and enables you to request a deposit or give a discount.
Invoicing Done Right = Get Paid Faster
Business invoicing is essential in order to get paid faster and ensure your business’s health report card stays in check. Don't worry if you haven't been doing invoices or feel you need to upgrade your system. The important thing about invoicing is that you recognize the need to start and organize this business process. Our DIY invoice tips will set you on the right path.