Invoices might seem like a small part of running a business, but getting the details right is important for keeping your customers happy and making accounting easier. Whether you’re a seasoned finance professional or a new business owner, figuring out what needs to be on an invoice helps you avoid misunderstandings, speed up payments, and minimize the back-and-forth with customers.

Below, we’ll discuss invoice details that go beyond templates, with tips, tweaks, and tactics that can reduce the time between “sent” and “paid” and the questions along the way. We’ll cover everything from establishing flexible terms that encourage timely payment to adding tax and discount information.

What’s in this article?

• What basic details should every invoice include?
  
• How to include clear item descriptions and line items
  
• How to display payment terms and conditions on an invoice
  
• How to add tax and discount information to invoice details
  
• Why you need to include contact information for invoices
  
• How to add notes or special instructions in invoice details
  
• Common errors to avoid in invoices
  

What basic details should every invoice include?

Every invoice should include the following details:

• Invoice number: A unique identifier for easy tracking.

• Date of issue: When the invoice was generated.

• Due date: The date payment is expected.

• Seller’s information: Your business name, address, contact information, and tax ID, if applicable.

• Buyer’s information: The recipient’s business or individual name, address, and contact information.

• Itemized list of products or services: A list of each item or service with a brief description, quantity, rate, and total price.

• Subtotal: The total of all items or services before taxes or discounts.

• Taxes: Any applicable taxes, including tax rates and amounts.

• Discounts or adjustments: Any discounts or additional charges applied to the subtotal.

• Total amount due: The final amount to be paid.

• Payment terms: Information on payment methods, late fees, or penalties, if applicable.

How to include clear item descriptions and line items

Using clear descriptions and specific line items on your invoice helps clients quickly understand the charges. Providing this extra detail can reduce the need for clarification so you can be paid faster. Here are some tips for how to make your invoice as comprehensive as possible:

• Be specific with descriptions: Avoid vague terms. Instead, provide concise but detailed explanations. For example, instead of writing “consulting,” write “2 hours of marketing consulting for ad campaign planning.”

• Use consistent naming conventions: If you have repeat clients, keep product or service names consistent across invoices. This makes tracking and matching easier for clients.

• Add units and quantities: Specify quantities and units (e.g., hours, pieces, packages) for each item. For instance, write “5 hours of web development” or “10 packages of stationery.”

• Include date or service period: For time-based services, include the date range or period (e.g., “design services from Oct. 1–15, 2024”).

• Break down complex services: If a service involves multiple steps, consider splitting it into line items—for example, “initial consultation (1 hour),” “design draft creation,” and “final revisions.”

• Use an item code (optional): If you have a system with item codes or product numbers, include them to make cross-referencing easier.

How to display payment terms and conditions on an invoice

Include any payment terms and conditions that your clients need to know on your invoice. List them in a separate section titled “Payment Terms” or “Terms and Conditions” near the total amount due. Here’s what this section should include:

• The exact due date (e.g., “Payment due by Nov. 30, 2024”). Avoid vague terms such as “net 30” unless you’re sure the client will understand.

• Accepted payment methods (e.g., bank transfer, credit card, digital wallet). Specify whether certain payment methods will incur additional fees.

• Any late fees or penalties, including the rate and when it applies (e.g., “A late fee of 1.5% per month will apply to any outstanding balance after the due date”).

• Any early payment discounts (e.g., 2% discount if paid within 10 days).

• Contact information such as an email or phone number for payment issues or questions.

• Any partial payment policies, including minimum amounts or associated fees.

How to add tax and discount information to invoice details

Every invoice should include information on tax rates and applied discounts. Here’s how to get this right:

• List discounts right after the subtotal: If you’re offering a discount, show it immediately under the subtotal with a simple description such as “10% Discount” or “Returning Customer Discount.” That way, the client knows how much they’re saving before seeing the final total.

• Break down the tax: If tax applies, add a line for it with the specific rate and the dollar amount, such as “Sales Tax (10%).” This will help clients see how the tax is calculated.

• Specify nontaxable items, if needed: If some items are not taxable (such as services in some places), mark these items “Tax Exempt” or list them separately.

• Clarify the total amount due: After factoring in discounts and tax, ensure that the total amount due clearly stands out at the end. This is the number that matters the most.

• Include your tax ID, if required: If you need to include a tax ID number for your records or the client’s, include it near the tax information. This is helpful for official documentation.

• Include any international taxes: If you’re billing an international client, consider adding a line about value-added tax (VAT), goods and services tax (GST), or other local taxes.

Why you need to include contact information for invoices

Some clients might need a quick clarification about a charge, discount, or tax. Including contact information on your invoice means they know exactly how to contact you so questions can be resolved quickly.

An invoice with a specific contact (such as a name, email, and phone number) also feels more polished and client friendly. It shows that you’re ready to help and available if something needs fixing, which reassures clients.

How to add notes or special instructions in invoice details

Adding notes or special instructions to an invoice can be helpful, especially if you need to clarify details or add a personal touch. Here’s how to do so effectively:

• Create a dedicated section: Add a small section labeled “Notes” or “Special Instructions” at the bottom of the invoice after the total amount. This makes it easy for clients to spot and keeps it separate from the main charges.

• Use friendly language: If you’re including special instructions, write them in a friendly, straightforward way. For instance, you can write, “Please let us know if you have any questions about the breakdown above!” or, “Thank you for your business! We look forward to working with you again.”

• Add payment instructions, if needed: If you have specific payment steps (such as a preferred method or bank account details), you can include them here.

• Mention project or service milestones: If the invoice relates to specific project milestones or phases, use this section to summarize them. For example, you might write, “This invoice covers Phase 1: Initial Planning and Design.”

• Include any discounts or late fees: If there’s a discount for early payment or a late fee for delayed payment, you can add a friendly reminder here, such as, “Enjoy a 5% discount if paid within 10 days!” or, “Please note, a late fee might apply for payments made after the due date.”

• Finish with a personal touch: If appropriate, add a short thank-you note or message of appreciation. For instance, it can read, “We appreciate your trust in us and look forward to continuing our work together!”

Common errors to avoid in invoices

Errors in your invoice details can delay payment and frustrate customers. Here are some common mistakes to watch for when you create invoices for your business:

• No invoice date: Including the date on an invoice lets clients know when the window for payment starts.

• No due date: Including the due date lets your clients know exactly when they need to pay.

• Vague charge descriptions: Descriptions such as “services rendered” and “materials” could confuse clients. Be specific to minimize back-and-forth.

• Missing or incorrect contact information: If clients can’t contact you with questions, payments can be delayed. Ensure your contact information is correct and easy to find on the invoice.

• No payment information: Not listing the payment types you accept or any late fees you might charge can confuse the client. Clarify payment information up front to help reduce questions later on.

• Calculation errors: Any errors in your math can lead to underpayment or the need to reissue the invoice. Double-check those numbers so you’re certain of the listed amount.

• Confusing number system: Random invoice numbers or inconsistent numbering can make tracking difficult for you and your client. A simple, sequential system (e.g., INV-001, INV-002) helps keep everything organized.