Invoicing 101: How to Fill Out an Invoice in 5 Easy Steps

By Anna Benzaquen

Published: April 12, 2023

There are a few things that can make your life as a business owner or freelancer easier: learning how to fill out an invoice correctly is one of them. In this step-by-step guide, we'll take you through the process of filling out invoices for all kinds of businesses - from freelancers and service providers to product-based and retail businesses. By following these simple steps, you'll be able to streamline the invoicing process and get paid faster for the work you do. So, let's dive in!

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How To Fill Out an Invoice? 5 Easy Steps.

Filling out an invoice can seem like a daunting task, but it doesn’t have to be. If you break down the process into a few easy steps, you’ll soon find out how simple it really is.

For further insights and detailed examples on invoicing within a company setting, be sure to check out our extensive guide on How to Invoice a Company: Steps and Examples.

Step 1: Fill in the mandatory information

Depending on your type of business, you'll need to include certain details on your invoice. Generally, all invoices should include the following:

Your business name and contact information including your address, phone number and website
Your customer's name and contact info (typically, their address, phone number and email address)
An invoice number (numeration should generally be sequential, like 001, 002, etc.)
The date the invoice was created
A description of the services you provided or products you sold
The total cost of the services or products

Step 2: Add payment terms and due date

Including payment terms and a due date is important to ensure you get paid on time. If you don't specify how much, when and how the customer should pay, it can lead to misunderstandings and late payments. To make sure you get paid on time, include the following details:

How much is due
When it's due
What type of payment methods are accepted
Any discounts, if applicable

Step 3: Add taxes

If you're required to charge taxes, make sure to include this information in the invoice. This will help ensure that your invoice is accurate and in compliance with local laws. In the US, some states require businesses to collect sales tax on certain goods and services. Be sure to familiarize yourself with the laws in your state or local jurisdiction.

Step 4: Create an invoice template

Creating a custom invoice template makes it easier to send professional invoices quickly. You can use a spreadsheet or invoicing software to create an invoice template. Once you've created the template, all you have to do is add customer specific details and the invoice is ready to be sent. Make sure that you choose the template format that matches how you want to receive payments and any other important invoice requirements.

Step 5: Send your invoice and respect your obligation to keep your invoice

When you've added all the details, it's time to send your invoice. The best way to do this is electronically as it ensures a fast delivery and also helps you save time. You can use email or your invoicing tool to send your invoice. Finally, always remember to keep a copy of your invoice for your records in case you need it for tax purposes.

By following these steps, you'll be able to create professional invoices quickly and easily.

How Do I Write a Simple Invoice for My Type of Business?

Now that you know what an invoice should generally contain, how do you go about filling out an invoice for your specific type of business? Let's have a look at different invoice template elements that might fit your needs.

Invoice Templates For Freelancers or Self-Employed

If you are a freelancer or self-employed in the US, you need to make sure that your invoice has all of the necessary information:

The amount to be paid (before & after taxes)
A description of the services that were provided and how long it took you to complete them.
Your name, address and contact information
Taxes or other fees that may apply
Your bank account details for the transfer
The date of the invoice and the due date for payment.
A unique invoice number

Invoice Templates For Service Businesses

What makes invoices of service businesses unique is how they are structured. Filling out an invoice for a service business involves more than just writing down how much you’re charging your client. Having a template that is designed for service businesses can help make sure you’re including all the necessary information in your invoice. The key elements are:

Service details: Describe the service provided.
Payment terms: Include how and when you expect payment.
Tax information: If applicable, include how much tax needs to be collected. Specific service taxes may apply, depending on your industry and state.
Contact information: Include how you can be reached for additional questions.

Invoice Templates For Retail Businesses

Invoices for retail businesses are different from other invoices because you’re dealing with sales and products. Learning how to fill out an invoice for a retail business may be more complicated, as there are more details that you need to provide. As a rule of thumb, an invoice template for retail businesses should contain the following elements:

Invoice number: This is how you’ll keep track of your invoices and the corresponding information.
Customer name and contact: This is how you’ll stay in touch with the customer.
Item description and quantity: You need this to make sure the customer is getting what they actually ordered as well as the right quantity.
Unit prices: This should include how much each item costs individually.
Tax: It’s important to state the sales tax and other taxes that might be applicable to the invoice.
Payment terms: You need to specify how the customer should pay and how long they have to do so.
Shipping information: This will let your customer know how and when their product will be delivered.
Total amount due: This should include the final cost of the invoice, including any applicable taxes.

If you're trading internationally, your invoice template should also include the country of origin and destination as well as specifications on how it was transported. It's important to keep a close eye on these details since they can affect how much custom duties you may incur.

Invoice Templates For Product-Based Businesses

Now, let’s take a look at invoice template elements product-based businesses need to keep in mind. The key elements of product invoices are:

A list of the items you are selling and how many
The prices for each item
If taxes apply, how much they add up to
Your contact information, so customers can ask questions if needed
Your payment terms, explaining how people should pay as well as the due dates
Where the products are coming from and how they will be shipped
The total amount due after adding any taxes
any other requirements that may be specific to your industry, sector, and/or state

How to Fill an Invoice for Digital Products?

Invoicing digital products in the US has some specificities that must be taken into account. For example, digital goods are not subject to sales tax in most states but may be subject to other taxes such as use tax or gross receipts tax. It is also important to keep track of any applicable state and local laws regarding digital goods, as well as any applicable federal regulations.

However, the fundamentals remain the same. Here's what you need to fill out your invoice:

Your business name and contact information, including address, phone number, and email.
Your customer's name and contact information, including address, phone number, and email.
Add a unique invoice number to help you keep track of payments and transactions.
Enter the products or services that you're providing, along with a brief description of each.
Include the unit prices for each product or service along with the quantity.
Calculate the subtotal and any applicable taxes
Total up the subtotal and taxes, and state the amount that your customer is due.