An invoice is a form that a seller or service provider uses to bill a buyer or client and request payment. Invoices list the products or services that a buyer or client has purchased, the itemized prices, and the total owing amount.

Creating invoices is essential for both businesses and freelancers to keep their finances organized. Furthermore, invoices help both sellers and buyers track payments and amounts owed.

If a seller ships products to a buyer, they usually send an invoice with the delivered products. Alternatively, a seller or service provider may send an invoice by mail or email or deliver it in person. Our printable invoice template allows you to add your information and produce a ready-to-send invoice.

As a seller or service provider, you should create and send an invoice right after a buyer or client makes a purchase or you complete a service. Invoices help you stay on top of your finances and maintain your accounting records.

It's standard to use invoices in most industries. Using a standard invoice template each time you need to create an invoice can help save you time and keep your financial records consistent.

If you’re a seller or service provider, using an invoice is beneficial because it:

• Formalizes your payment request to the buyer or client
• Helps you track the buyer or client’s payment(s)
• Enables you to maintain financial records
• Allows you to document and track sales
• Helps the buyer document their purchase for their records
• Documents your revenue for tax purposes
• May protect you legally (e.g., if a buyer refuses to pay, you have a record)

No. An invoice and a receipt are different from one another. An invoice allows you to make a payment request. Alternatively, a sales receipt acts as proof of payment.

If you need to create a proof of payment when selling or buying an item, consider using a Bill of Sale.

Creating an invoice is very easy when you use a template. Our form allows you to create a single invoice or a reusable template, both customized to your business’s needs.

When you create an invoice you may include some or all of the following information:

• Invoice number
• Purchase order number
• Purchase order date (the date the customer creates the purchase order)
• Shipping information, including the shipping address, mode of transport, the weight of the package, and the number of pieces being shipped
• Seller and buyer details, such as their names and addresses
• Sales tax information
• Item details, including the item’s name, description, price, and quantity
• Shipping and handling information (if applicable)
• Insurance information

If you are a service provider who does not sell goods, your invoices may be simple and not include things like purchase order numbers. If you sell or ship goods, your invoices may include additional information, such as purchase order numbers and shipping information.

An invoice number is the unique, identifying number that you assign to an invoice so you can track transactions and payments. An invoice number is also known as an invoice ID. Invoice numbers should contain only numbers, only letters, or a combination of both.

Invoice numbers are an extremely important part of an invoice because they identify a specific purchase with its corresponding payment from the client or customer.

How do I assign invoice numbers?

You can assign invoice numbers to your invoices in multiple ways. Regardless of the numbering method, it’s important to make every invoice number unique. Generally, contractors and small businesses will number invoices sequentially or chronologically.

• Sequentially: If you choose to number invoices sequentially, assign your first invoice with a number, such as 1000000. The next invoice’s number would then follow in the numerical sequence. In this case, the next invoice number would be 1000001.
• Chronologically: If you choose to number invoices chronologically, insert an invoice’s date into the invoice number along with a sequential number. For example, if you made an invoice for a customer on September 5, 2021, the invoice number could be 20210905-01.

Additionally, you may choose to include an assigned customer number at the beginning of an invoice number and separate it by a hyphen. Including a customer number can help you easily identify invoices for your different customers.

You may include letters in an invoice number to help you further organize and identify customers, orders, and projects.

In most states, the sales tax of the state where the goods are received will apply. However, in some states, the sales tax of the seller may apply.

The buyer or client should consult authorities in their jurisdiction to confirm the requirements for collecting sales tax, especially where a transaction involves multiple jurisdictions.

Store invoices for at least three years after your customers or clients pay. Keeping records of your invoices can be helpful for tax purposes. Also, if needed, you can reference past invoices to track your finances.

Keeping paid invoices can also benefit your customers. A client may lose their invoice and ask you for a copy for their records. If you keep invoices for multiple years, you can help any customers that come to you asking for a past invoice.