Invoices are some of the most important documents that you need to use on a regular basis in your small business or freelancing career. They will help improve cash flow and keep your business afloat.
While many people do use them regularly and generally well, there are still many others that have little or no clue exactly what is required of them for each invoice.
One of the most important things that most are aware of is that it should have the word ‘invoice’ prominently displayed. Besides that, they may not know much more.
That’s why today we’ll see which are the most important invoice fields you need to know and use.
Buyer and seller details
On your invoice you should always have the important details for both the buyer and the seller. This is one of the most important invoice fields and the first one.
These details include the seller’s full name, his or her registered billing address, and any applicable and necessary tax ID numbers. The seller’s information should be similar (name, address and ID number).
It is recommended, though not mandatory, for the seller to include his or her phone number and email address to make it easier for customer to get in touch with them.
Unique invoice number and date
You should always include the date that the invoice is issued on every invoice, and of course the dates do not have to be unique. In other words, you can issue many invoices per day with no problems.
However, your invoice number should be unique. Specifically, you cannot have the same number on two invoices. This is not only a potential record-keeping problem. It could also be a tax problem if you ever get audited.
You must include the details of the specific services or products that you have delivered or rendered to your customer.
This is important as it will help to clear up any possible confusion that your customer may have when he is looking at the invoices. It often happens that a dispute occurs when there is insufficient information included on the invoice.
You should always include:
- the date of delivery
- the specific item or job name, duration of work, etc.
- the quantity of goods delivered
- the hours worked
- the unit price and the hourly rate
With these, you will be able to avoid any confusion and delays in your invoice payment and get them paid faster.
Taxes & totals
Your invoice should include two totals: the subtotal and the final, full total. Your subtotal will be before any taxes, fees or charges, and the invoice total will of course include those.
As for taxes, however, it is difficult to discuss specifically what type of taxes will need to be included because taxes are specific to the country and, in many places, to the state or area.
While you may be aware of taxes for your own country, you should also be aware of what taxes are needed if you have international clients. This gets more complicated, but it is your responsibility to not only be aware of it but to make sure you are compliant with all applicable tax laws.
The most important invoice fields
All of these invoice fields are absolutely important when you are creating your invoices.
Not only will they allow your document to be legally binding, but they will also ensure that your invoice process goes smoothly.
With better invoices comes faster invoice payments, which means more cash flow and a greater opportunity for your business to succeed.