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Creating an Invoice: A Step-by-Step Guide for Beginners

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Let’s be honest:

Getting paid is the best part of completing a task. However, most freelancers dread the process of making an invoice. Not because it is complicated but because there is a need for more information on how to make an invoice. 

Well, today is your lucky day!

In this piece, we’ll highlight the entire process of how to create an invoice. The journey starts with setting up the invoicing system. And it ends with itemizing rates and more.

So, whether you’re a seasoned freelancer or just starting your entrepreneurial journey, this guide will walk you through the entire process.

But before setting up an invoicing system, why is invoicing important?

Let’s uncover that first.

Why Is Invoicing Important?

An invoice is an official manuscript you dispatch to a client after providing services or goods. This document requests payment and indicates detailed transactional records. It also comes in handy during disputes as a legal record of business transactions.

It gets simpler to learn how to invoice once you realize why it's necessary. These are a few of the reasons:

  • Timely payment: Professional invoicing reduces confusion on vital payment information; hence, it helps the client pay on time.
  • Record Keeping: Imagine sending a message or email with the payment details to a multinational company! The odds of your payment details getting lost are higher. So much so that using an invoice helps the client with proper record-keeping.
  • Financial Tracking: Invoicing helps auditors fully understand a business’s economic track record. Using invoices, you can tally your income from various projects as a freelancer or business.
  • Minimizing payment disputes: Using other means to send payment requests may be less efficient. Occasionally, consumers may claim that they never got the payment request as an excuse not to pay you. Knowing the invoice creation process and how to apply it saves you so much trouble in such cases.
  • Professionalism: An enterprise with a consistent track record of using invoices presents itself as a professional entity. This builds trust.

Setting Up Your Invoicing System

Now that you understand why knowing how to create an invoice is vital, next comes how to set up a working system. An invoice system helps you process the task faster. It also lets you send invoices on time and aids in faster tracking.

Today, there are several ways to create and manage invoices; the following are the standard options:

  • Manual Invoicing: This mode of invoice generation entails employing word processing software like Google Docs or Microsoft Word. You may also use spreadsheets like Microsoft Excel or Google Sheets.
  • Pro: highly customizable.
  • Cons: Time-consuming and prone to errors.
  • Invoicing templates: The internet has many online resources offering free invoicing templates. This is the best way to create an invoice, especially if you are a beginner.
  • Pro: Beginner-friendly.
  • Con: Designs can be generic.
  • Invoicing software: Invoice software is a digital program that facilitates the invoice creation process. You can choose from many templates, customize them, add brand and customer details, and send them off. Software such as this guides you on how to generate an invoice number, the due date, or the creation date. Some also allow you to receive and process other invoices. Examples of efficient invoice generators are Ruul Invoice Generator, FreshBooks, and Zoho Invoice.
  • Pro: Efficient process.
  • Con: Some software takes time to grasp its operation fully.

When deciding on a system, refer to your needs and preferences. Manual invoicing may suffice for small businesses, and templates are the same. Invoice software saves time and effort when you have a more extensive clientele.

Vital Details to Include in an Invoice System

An invoice template says a lot about a business.

If it’s immaculate, it exudes order; if it’s messy or complicated, it shouts disorder. The information you include in an invoice dictates the template you choose.

These are the essential details to provide, in case you're wondering what you ought to include. You may use this information when you are looking into how to create an invoice template.

  • Business information: Your company name, logo, address, email address, and phone number.
  • Client information: Client’s name and contact information.
  • Invoice number: You and the client can both trace bills with this unique identification number. The typical numbering sequence is usually “Invoice #001;” other types include the date like “Invoice #2024-04-26.”
  • Service and goods description: This section highlights all the services and goods the client received. It includes specific details on types, quantities, or hours served.

The other vital information for offline and online invoicing is:

  • Invoice generation date.
  • Due date.
  • Price per unit/service.
  • Subtotals and total amount due.
  • Taxes.
  • Payment terms.

Please note that you can add any information in this section.

Choosing the Right Invoice Template

After you have all the details sorted, you start choosing the suitable template by selecting a clean, professional, well-spaced design. Ensure you use a professional font that is easy to read.

That’s it!

But remember: stick to one template for consistency and consider branding it with brand colors and logos to match your business voice.

Online invoicing software allows you to choose any template you wish. But suppose you decide on manual invoicing; here are simple step-by-step guides on how to make an invoice using Word and Excel:

How To Make An Invoice Using Word

Here is how to make an invoice using Word:

  • Open a new blank document: Click “file” and select new.
  • Header: Click “insert,” select “Header & Footer,” choose a pre-designed style or leave blank. In the new header section, enter business details. You may insert a logo using the ‘insert’ tab and add the image.
  • Client Details: Below the header section, label the section “Bill To”’ and then key in client details underneath.
  • Invoice Details: On a new line, type “Invoice#.” and manually type the invoice number. Click “Insert” -> “Quick Parts” -> “Field” and choose “Seq #.” This prompts automatic sequencing for all other invoices you’ll create. Type “Invoice Date” then “Due Date.”
  • Service/Products Table: Click “Insert” -> “Tables” and select the needed columns and rows. On the top left cell, click and type “Description” and proceed to enter column headings like “Quantity”, “Unit Price,” and “Total Price.” Fill the rows with the specific service or good details.
  • Calculations: You can use formulas to calibrate the subtotal and total prices. Remember to add the tax percentage that will automatically apply after using a formula.

Include a sentence or two on your payment terms.

How To Make An Invoice Using Excel

Here is the format for how to make an invoice on Excel:

  • Start: Create a new workbook in Microsoft Excel.
  • Headers and labels: Use cells in the first rows to label your business details, client details, invoice number, date, and due date.
  • Service/products table: At around row 5, label the columns as Description, Quantity, Unit Price, and Total Price. Use the Total Price column formula to multiply Quantity by Unit Price.
  • Calculations: Use separate cells for subtotals, taxes, and the final amount due. Use formulas referencing the relevant cells on the table to give a final amount.
  • Formatting: Create borders and format the table for a more organized look.

Adding Client and Project Details

You must take a closer look at the client and project details. Missing a number or description here can cost your business.

So, please start by double-checking the client information. Ensure the name and contact information are accurate.

Next, provide clear and concise project details. This helps the client explicitly understand what they are paying for.

Finally, use clear and precise language. List the exact names of the service and product as indicated while selling the items. If you use a synonym of the service or product, you might confuse the client.

Itemizing Services and Rates

It is imperative to guarantee that the client understands how you list services and costs.

To begin the process, be specific. Break down the service or products, each on a separate line or cell. Include the exact quantities and units. For instance, for liquids, use liters or ounces. If it is a service, include the hours you worked.

Finally, use appropriate formulas to determine the totals, including taxes and other expenses like delivery fees.

Sending and Managing Invoices: Keeping Your Cash Flow Flowing

After learning and implementing how to make an invoice, you prepare it and send it! However, you may also need a system to oversee the procedure.

Here are some ideas to streamline this process:

  • Choose a secure and convenient mode to deliver the invoice. Use email attachments or online invoicing platforms. Physical mailing is another option.
  • When sending via mail, include a brief description of the invoice.
  • Offer the client multiple payment avenues they can use. The typical ones include credit card payments, bank transfers, and internet payment portals such as PayPal.
  • Keep a record of all invoices sent, even after complete transactions. Use accounting software or a spreadsheet for this task.
  • Suppose the client is overdue on payments; send a polite reminder email to nudge them. Send the invoice number, due date, and amount in this message.

How to Use Ruul Invoice Generator: Streamline Your Invoicing Process

If you struggle with manual invoicing, the Ruul Invoice Generator is here to help, and fast!

Through the step-by-step invoice creation procedure, you will be guided by its intuitive UI. You select a ready-made template and alter it to fit the brand. The automatic numbering eliminates further manual input and facilitates faster invoice tracking.

Ruul’s invoice software also stores client details securely. Anytime you sell to the same client, you refer to this data. With Ruul on your team, sending invoices becomes a breeze. The platform lets you handle the selling part as it covers the invoicing.

No more invoicing woes!


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