What do you need to include on an invoice?

Your invoices are probably the most important documents your business will ever produce because, without them, you won’t get paid. A professional-looking invoice can pay dividends, because it creates a professional impression for your business, and might even get paid faster than invoices that are less impressive. But while their appearance might best be left to a design professional, you can ensure that your invoices contain all the information they need. It will make it easier for them to be paid.

We’ve compiled the Rangewell guide to what needs to be included.

Make sure your invoice includes:

1. The word ‘invoice’

It seems obvious, but you need to ensure that all your invoices are clearly marked with the word ‘Invoice’. Make it big and bold and at the top – the first thing the reader will see.

This makes it clear that it’s a request for payment and not some kind of receipt. It reduces confusion and helps people know exactly what you want them to do – which is, of course, pay up.

2. The name of your business

Your invoice should feature the name of your business prominently. It’s probably not enough just to feature your logo – include your full trading name. It will be important that people know exactly who they are dealing with, and helps avoid any claims that they didn’t recognise who the invoice was from.

3. Your trading address

Include all your contact details on your invoice, including your:

•         Full trading address
•         Your name
•         Phone number
•         Email address

It’s then easier for the customer to send a cheque (if they still pay in the old fashioned way). Your personal details are a big help if your customer wants to raise any questions with you. If they are not there, they may not bother, and you might find yourself needing to chase them for payment.

4. Your registered address

If yours is a limited company, you’ll need to include your registered office address as well as your company registration number, just like you should already have on your company letterhead. You’ll need to show the registered name of your company, as well as any name which you’re trading under.

This is a legal requirement, set out in The Companies (Trading Disclosures) Regulations 2008 as amended by The Companies (Trading Disclosures) (Amendment) Regulations 2009.  

5. An invoice reference/invoice number

It is not actually a legal requirement, but it makes things easier for your accounts department and for your customers if you include a unique invoice number on each invoice.

If there’s a query, you can go straight to the invoice referred to, and if you ever need to issue a duplicate, there’s less risk of it being paid twice.

You can just use a sequence of numbers. Starting with 1 does not look professional, and putting a few zeros at the front may make sorting easier in the years to come after you have hopefully issued thousands.

If you have repeat customers, you can include a letter code. So you might issue invoices to us at Rangewell starting with RAN – hence RAN0001, RAN0002 etc.

6. Your VAT details

If you’re VAT registered, you’ll need to include your VAT Registration Number. This is a legal requirement to allow the recipient to check that you are actually VAT registered, and not adding a VAT surcharge fraudulently.

7. The name of the business you’re invoicing

You need to let the customer know the invoice is for them. Include their address, to save confusion – and help ensure the invoice gets delivered. Less obviously, putting a contact can increase the chance of getting paid quickly. If people know you can call them personally to chase, they are less likely to delay.

8. The supply date – when goods or services were provided

This is a legal requirement for VAT invoices, and referred to as the “supply date”. It has implications for VAT payments to HMRC. It is also good practice and saves arguments even if you are not VAT registered.

9. A date for the invoice

This is the date on which the invoice is created. It does not have to be the date when the goods or services were provided.

10. The customer’s purchase order number

If your customer has provided a P.O. number, include this on your invoice. It will identify which purchase order the invoice relates to. Your customer’s accounts department may not be able to (or at least, won’t be happy to) pay without it.  

11. Details of what you provided

You need an itemised list, possibly with a description of every product or service you’re invoicing for. Provide the cost of each item, ideally in a column to the right.

The clearer the description, the less likely it is that a customer will have a query.

12. A total

The total should be at the bottom of the column of individual items so it can easily be checked by the customer.

You can show any discount (or surcharge) that you want to apply.

13. VAT

You’ll need to include VAT rate and total amount of VAT charged after the total to provide a grand total that needs to be paid.

This is easy if all products and services are subject to VAT at the same rate. If not, you will have to show the amount of VAT and VAT rate charged on each item. You can see details on the HMRC website.

14. Payment terms

The payment terms will generally be based on the Terms & Conditions which have been agreed by the customer. If they have agreed to payment in 30 days, make sure you include it. Without it, customers have an excuse to delay payment until they are ready.

15. Details on how to pay

You need to include clear details of how to pay, as customers have little interest in finding out for themselves.

State which payment methods you’ll accept. With payment by cheque you only need to provide a payee name, but these days, you will probably want BACS/direct payments. These require your account details:

•         Bank name
•         Account name
•         Account number
•         Sort code

16. Other requirements

If yours is a limited company, all the requirements relating to business stationery apply to invoices. So, if you include the names of any directors on your invoices, you must include the names of them all.

There are other legislation and regulations applicable in certain industries, such as financial services, where firms must state that they are authorised and regulated by the Financial Conduct Authority. Your regulator or trade body will provide details about best practice and industry-specific legal requirements for your particular sector.

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