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What is an Invoice?
An Invoice is a document sent to business customers or clients for goods or services. Invoices are a crucial part of business transactions – and can be used both to request payment and to provide formal documentation of a sale after payment has been made.
Invoices may contain all the relevant details of the exchange. For example, they can include the names of the buyer and the seller, the date of purchase, and a breakdown of the charges. The invoice may itemize charges listing the price and quantity included for each item. You may also opt to include all relevant taxes, fees, or discounts that impact the final price.
An Invoice is a key document for any business—make sure you're covered with Rocket Lawyer.
When to use an Invoice:
- You need to provide an itemized record of a transaction.
- You need to request payment for an itemized list of goods or services.
- You want to document a sale or purchase for bookkeeping or tax purposes.
Sample Invoice
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Invoice
| Date: |
| Invoice No: |
| Business: |
| , |
Bill to:
| Customer: |
| , |
| Description | Quantity | Unit Price | Total Price |
| Subtotal: |
| Discount: | % | Discount Total: |
| Tax Rate: | % | Sales Tax: |
| Shipping Charges: |
| Purchase Total: |
Make all checks payable to . If you have any questions regarding this invoice, contact by phone at or via email at . Interest may accrue on any balance that remains unpaid after 30 days.
Thank you for your business.
About Invoices
Learn about how to written formal request for payment
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What do I need to make an Invoice?
Making an Invoice online is simple. Just answer a few questions and Rocket Lawyer will build your document for you. Having the details ready can make the document building process a lot simpler. To make your Invoice, you will need the following information:
Invoice details
- Seller and buyer details (name, address, phone number, e-mail, etc.).
- The Invoice number.
- The Invoice date.
- Number of days the buyer has to pay the Invoice.
- Details of the items or services being sold (including a description, quantity and price).
- Taxes or fees.
- Discount percentage and total, if any.
- If a purchase order was created for this Invoice, include the order number and date.
Payment
List the accepted methods of payment, including:
- Credit card.
- Debit card.
- Bank transfer.
- Check.
- Cash.
For each of the above payment methods, it is important to list details including which type of credit cards are accepted, or the name to make out checks to and where checks may be sent. By preparing this information in advance, you can have your Invoice ready in no time.
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What happens if the customer does not pay the Invoice?
Your Invoice should include the payment period and due date for the goods or services provided – both for record-keeping purposes and to avoid future conflicts. However, the latter is not a guarantee. If a customer does not pay by the date listed on the invoice, you may need to take action.
There are a lot of different ways to handle a situation like this. Small businesses may simply want to call their customers to remind them that payment is due. Some businesses will opt for sending a past-due notice, like a 60-Day Past Due Letter, as a reminder.
Depending on your situation, you may want to take a more aggressive approach and charge interest in the case of late payment. To charge interest, however, a business is generally required to specify in your contract, Invoices and letters requesting payment that you intend to charge interest if payment does not occur in a timely manner, Including details such as the interest rate and dates when interest starts accruing can lead to more timely payments. Including information about interest on late payment is critical so that the buyer is aware from the start and able to be held accountable if needed.
Whatever the case may be, Rocket Lawyer is here to help you out if you run into a nonpayment issue or any other dispute. If you have questions about an invoice or anything to do with your business, you can always ask a lawyer.
Invoice FAQs
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Am I legally required to issue Invoices?
Most of the time, no. However, it is good practice for all businesses to generate Invoices as part of the overall transaction process – and you do need to issue one if a customer specifically asks. They are often good tools to facilitate quick payments and avoid discrepancies and delays. Also, Invoices are useful documentation if you need to pursue debt collection for an unpaid bill.
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How can Invoices help with my tax returns?
Since Invoices contain itemized charges and recorded transactions, they can help you keep your finances organized. For this reason, they are often used as proof of a transaction or as financial records for taxes and bookkeeping, as well as calculating business turnover, profit and expenses.
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How do I create my own Invoice?
With Rocket Lawyer, it’s as easy as answering a few questions. Get started now and we will build the document for you.
Don’t worry: if you need to make changes to the Invoice after building your document, you will be able to make changes online or you can download it in Word format at the end of the process.
Remember that if you have any questions you can easily ask a lawyer or get affordable legal advice when you connect with a Rocket Lawyer network attorney.
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What is usually included in an Invoice?
By making an Invoice you provide a record of goods sold or services provided, and the amount owed in exchange for those goods or services. However, this is not all that a good Invoice can cover. Here are some more details that Invoices usually provide:
- Use of the word 'invoice' at the top of the document to let customers or clients know they owe money.
- Separate invoice number for tracking transactions.
- The seller's full business name, contact information and address.
- Details of the buyer.
- The description of goods sold or services provided.
- Date of sale or services.
And if the Invoice has already been paid, you can include the following information:
- Price and mode of payment.
- Date of payment.
If you are requesting payment, include the following details:
- Price.
- Payment due date.
- Payment options.
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What is an appropriate payment period for an Invoice?
An Invoice can (and should) include a reminder of the payment period, or a preferred payment due date if one was not discussed.
Many small businesses require payment upon receipt of an invoice or within 14 calendar days but larger organizations may agree to up to 60 days (or longer, if reasonable for both businesses). If there is no specific payment period, clients may want to check with the business after receipt of the Invoice. Generally, 30 days is considered to be the standard payment period amongst businesses.
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What payment methods can I set out in an Invoice?
Many businesses offer the option of credit card or electronic payments. If this is your case, make sure to include whether you accept credit and debit, which credit card companies you accept, and which electronic payment processors you use. If this incurs a processing charge that you expect customers or clients to cover, however, be sure that is detailed in your Invoice.
Alternatively, you can ask to be paid by check. Specify the best postal address, whether it’s yours or your bank’s. Some businesses also accept direct bank transfer. If you choose to accept bank transfers, make sure to include your bank account name, and the correct routing and account numbers on all Invoices.
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