An invoice is a commercial document issued by a seller to a buyer, relating to a sale transaction and indicating the products, quantities, and agreed prices for products or services that seller had provided to the buyer. It can be paper or electronic based.
An Invoice must include all necessary information. Here we indicate the information that needs to be provided in an invoice.
Important: Some times, this obligation (of invoicing) is issued by the those who receives the services or products. This method is called "Self-billing". Attention! In order for the invoice to be valid, a bilateral agreement must be preceded.
A sample of the Self-Billing agreement, you can find HERE.
1. Name and address of the seller Company / Trading Name, Address, UTR, Registration number, Phone number, Email. It's perfect when the name and rest details of the specific seller provided as well.
2. Name and address of the buyer Company / Trading Name, Address,Phone number, Email.
3. Invoice number The invoice number/reference is unique for each invoice. You’ll have to keep a record of the numbers/references you’ve already used so that you don’t accidentally duplicate one. Some people use just sequence of numbers, for example, 0001, 0002, etc. But, you can include letters in an invoice reference as well, if you want it.
If you have a number of repeat customers, you might consider putting a few letters in front of numbers to indicate the client. This means you can reuse the same invoice number, changing just the letters. For example George 0001, you can make it G0001 and for UPECO 0001, U0001.
4. Costumer reference Some customers asks you to put some specific (by them) mentioned reference number as well. So is good to have some space in your invoice for this purpose.
5. Invoice date Generally this is the date on which the invoice is created, not necessarily the date the goods or services covered.
6. The date the goods or services were provided This is otherwise known as the “supply date” and it's used mostly in a VAT invoice.
7. Details of the products/services that provided and their prices It's necessary to provide a clear description of what was sold. This will usually mean a line by line list of each product or services that has provided, and the cost of each of them. The clearer the description, the less likely that a customer will need to contact the seller to query the invoice. It's also mean the the invoice will be settled more promptly.
8. Total amount for the invoice The total of the cost of all the individual products or services covered by the invoice. If there is any discount, you must also note it down.
9. Payment terms The payment terms describes generally, how much time the customer have at his disposal to pay the Invoice. For example, “Payment should be made within 30 days”.
10. Details on how to pay the invoice The seller need to include the following account details if you allow BACS/direct payments: Bank name, Account name, Account number, Sort code. If payment is by cheque, then only need to be provided a payee name. However, it's preferable for the customer to make payment directly. Because there is no extra hassle. Also some banks charge for processing cheques.
If you’re VAT registered, then you need to provide some extra information. A detailed guide on this point, you can find on HMRC's official website. Very briefly, the main extra info are: A) VAT Registration Number of the seller B) The amount of VAT and VAT rate charged on each item C) The VAT rate and total amount of VAT charged.
Also, if the seller is a limited company, then standard requirements relating to stationery apply to invoices. For example, if the seller choose to include the names of directors on invoices, then he must include the names of all directors. For details, read the "The Companies (Trading Disclosures) Regulations 2008".