An invoice is a request for payment for services performed or products sold, and it details the goods and services provided to a client along with the corresponding costs. Sending invoices to clients is an important part of running any business, whether you’re a freelancer, a small business owner, or the leader of a growing business.

In this article, we’ll explain how to create invoices, how to send invoices, the best free invoice generators, and more.

What is an Invoice?

An invoice is a formal document that details the goods or services provided by a business to a client, along with the corresponding costs. It serves as a billing statement and an important record-keeping tool. When a client receives an invoice, they know how much they need to pay, what goods/services they’re paying for, when they need to make the payment(s), and how to make the payment(s).

What Information Does an Invoice Include?

A well-designed invoice generally includes the following elements:

• Your Business Information: Include your business’s logo, name, website, email address, phone number, and mailing address. This info is generally placed in the top left corner of the invoice.

• Your Client’s Information: Identify who this invoice is intended for by including your client’s name, website, email address, phone number, and mailing address. This info makes it clear who the invoice is for and it is generally placed in the top right corner of the invoice.

• A Unique Invoice Number: Invoices typically include a unique invoice number to help you organize them in your records and locate them more easily in the future. This may not be necessary for smaller businesses with fewer invoices, but it is standard practice for midsize to large businesses with more invoices.

• Invoice Date: Include the date that you send the invoice to the client. This creates a record of this date and it helps ensure that the invoice gets paid in a timely manner.

• A List of Goods and Services: Include a detailed, itemized list of the goods and/or services you provided to the client and are requesting payment for. Include any itemized amounts due for these goods and services as well.

• The Total Amount Due: Include the total amount due for all goods and services after the itemized list.

• Payment Terms: Include the payment terms you require, such as paying 50% upfront and 50% on completion of the project or paying the full amount within 30 days of the completion of the project.

• Payment Method(s): List payment methods at the bottom of the form. This could include a bank transfer (ACH transfer), a transfer service like Wise, Bil.com, Venmo, Paypal, Zelle, or other options such as a physical check or cash.

How to Create an Invoice

Invoices are relatively simple to create, and you can do so manually with a PDF editor like Adobe Acrobat. You can even use Adobe Photoshop or another similar image editing software to create and personalize your invoices. However, these methods can be time-consuming and prone to error depending on the volume of invoices you create.

While these manual options will get the job done, a fast and easy option to generate invoices is to use an invoice generator. Learn more about these below.

Best Free Invoice Generators

To streamline your invoicing process and save time, consider using a free invoice generator. These online tools provide user-friendly templates and features to create professional invoices in no time. Some invoice generators can also track past invoices, send payment reminders to clients, and even link to your accounting software to update it automatically.

Some of the best free invoice generators include…

• Canva: A versatile design tool with free invoice templates and highly customizable designs, making it ideal for creatives and designers.

• Wave: User-friendly interface, customizable invoice templates, and integrated accounting and bookkeeping features to save you time and hassle when preparing and tracking invoices.

• Zoho Invoice: Clean and professional templates, easy invoice creation, multiple built-in payment options, and expense tracking capabilities.

• Invoice Ninja: Includes advanced features like recurring invoices and time tracking, customizable branding, and integrates with popular payment gateways to make accepting payments a breeze.

• Free Invoice Generator: Simple and easy-to-use, customizable templates, quick generation of professional invoices.

• Invoice Home: Clean and modern design, customizable templates, supports multiple currencies for clients located abroad.

These generators offer a range of features, from basic invoice creation to advanced functionalities like expense tracking and payment reminders. By utilizing a free invoice generator, you can improve your business's efficiency and maintain accurate financial records.

An invoice is a request for payment for services performed or products sold, and it details the goods and services provided to a client along with the corresponding costs.

How to Send Invoices

There are several effective and simple methods for sending invoices to clients. Email is a convenient and easy option for many businesses, while midsize to larger businesses may also choose the more formal method of mailing a physical invoice to the client’s address. If you use an invoice generator, it will likely include a built-in method to send invoices to clients.

How to Pay an Invoice

There are many acceptable methods to pay invoices. Some of the most common methods include…

• Bank transfers (also known as ACH transfers)

• Transfer platforms such as Wise, Bill.com, Paypal, Venmo, Zelle, or others

• Online payment portals can allow clients to pay directly through your website

• Mailing physical checks

• Physically handing the client cash

Keep in mind that if you receive an invoice, it may already specify a preferred payment method. Also, documentation is key for maintaining your own records and for preparing your taxes at the end of the year. Make sure you keep documentation of all payments made to protect yourself in the future.

Who is Responsible for Creating Invoices in Midsize Companies?

The responsibility for creating invoices often falls on a specific team or department. This can vary depending on the company’s organizational structure, industry, and the complexity of its operations. Typically, the following departments are responsible for invoice creation:

• The Accounting Department: This is the most common scenario. Because the accounting department already tracks income and expense data, it may make sense for them to create invoices as well.

• The Sales or Customer Service Teams: This is also common - the sales and customer service teams work with clients and understand their projects intimately, so it may make sense for them to create invoices and send them to clients.

• A Dedicated Billing or Invoicing Team: Midsize to large companies may benefit from employing a dedicated billing team that is responsible for billing and invoicing. This frees up the accounting and sales/customer service teams to focus solely on their core competencies.

If you’re a freelancer or small business owner, the responsibility for creating and sending invoices may fall on you. Luckily, invoice generators help automate and streamline this process, making it as quick and easy as possible.

How to Create and Send Invoices While Staying Creative

By understanding the fundamentals of invoicing and utilizing a capable invoice generator, you can streamline your business processes, improve cash flow, and maintain accurate financial records.

Utilizing an invoice generator will allow you to spend less time focusing on creating and sending invoices and more time focusing on growing your business, creating products, and serving your clients.

Remember, a well-crafted invoice is not just a billing document. It’s also an extension of your brand and a reflection of your professionalism and commitment to your clients and customers.

Frequently Asked Questions (FAQs)

How to create a professional invoice?

To create a professional invoice, use clear and concise language, choose a clean template, include your company logo, and proofread carefully.

What is the best free invoice generator?

There are many great free invoice generators, but some of the most popular include Wave, Zoho Invoice, and Invoice Ninja. The best choice for you will depend on your specific needs.

How often should I send invoices?

It's best to send invoices as soon as the work is completed or the service is provided. This ensures timely payment and helps maintain a healthy cash flow.

How to deal with late payments?

To deal with late payments, consider sending polite reminders, offering payment plans, or charging late fees. It's important to maintain a professional and understanding approach.

Disclaimer: the information provided in this article is for educational purposes only and does not constitute tax, accounting, investing, legal, or financial advice. The information in this article does not take into account your unique financial or business situation or goals, and YCCPA cannot be responsible for reader's financial decision-making. YCCPA's goal is to educate and support you on your creative business journey.

Written by David Kindness, CPA

David is a CPA (Certified Public Accountant) and professional photographer, videographer, and designer based in San Diego, California. Learn more.

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