How to write
an invoice

An invoice is a request for payment that also becomes your record of the income. Writing one well takes five minutes and saves weeks of chasing, because a customer's accounts team can only pay what it can process. This guide walks through each part in the order you would write it, then shows a finished example.

Step 1: Your details at the top

Start with who is asking to be paid. GOV.UK requires your name, address and contact information. A sole trader must show their own name and any business name they use, and when trading under a business name, an address where legal documents can be delivered. A limited company must use its full registered name, exactly as it appears on the certificate of incorporation.

Add an email address and phone number so the customer can query the invoice rather than park it. If you are VAT registered, your VAT registration number belongs here too.

Step 2: The customer's details

Write the name and address of the business or person you are invoicing. For a company, use its registered name rather than a trading name, and if you were given a purchase order number or a named contact, include both. Large customers often reject invoices that do not quote their purchase order.

Step 3: An invoice number and the dates

Every invoice needs a unique identification number, and a VAT invoice needs one from a sequence. Choose a format once and keep counting upwards; the invoice number generator can build one for you.

Then write two dates. The invoice date is the day you issue it. The supply date is when you delivered the goods or finished the work. They are often the same, but when they are not, both must appear.

Step 4: Describe what you are charging for

Give a clear description of the goods or services. One line per item works best, with a quantity and a price for each. "Website design" is weak; "Design and build of five-page website, as quoted on 3 March" leaves nothing to dispute. For time-based work, show the hours and the rate.

Step 5: The amounts

Show the price of each line and the total owed. If you are VAT registered, show the amount before VAT, the VAT rate and amount, and the total including VAT; the VAT calculator does the sum. If you are not registered, charge no VAT and show none.

Step 6: Payment terms and how to pay

State when you expect payment and how. Write the term and the date it produces, for example "Payment due within 14 days, by 21 March". The invoice due date calculator works it out for any term. Add your bank details or payment link, and the invoice number as the payment reference so the money is easy to match.

A worked example

The labour comes to £240 and the materials to £150. Jo is not VAT registered, so no VAT appears anywhere on the invoice.

Before you send it

Check the arithmetic, check the customer's name is spelled as they spell it, and save a copy. Then send it promptly: the sooner an invoice arrives, the sooner the payment clock starts. The guide on how to send an invoice covers email, attachments and following up, and what a UK invoice must include is the checklist version of this page.

Invoice layouts that get paid

The legal details are the floor, not the ceiling. How you lay them out decides how quickly a customer can approve and pay. Accounts teams read invoices in a set order: who is it from, is it for us, what is it for, how much, and when. Put those answers where the eye lands first.

How the details differ by business

The core list is the same for everyone, but the extras depend on how you trade.

For CIS work, the guide on CIS invoice requirements and the reverse charge invoice wording guide cover the extra lines. If you are unsure whether VAT belongs on the invoice at all, start with do I charge VAT on my invoice.

Fixed compensation you can add when a business customer pays late

• Debt up to £999.99£40
• £1,000 to £9,999.99£70
• £10,000 or more£100

Descriptions that avoid queries

The description is where most invoices are questioned. Write it so that someone who was not there can see what they are paying for.

• Name the job and the place: "Repair of garden wall, 12 Elm Road".
• Quote the reference the customer gave you: a quote number, a job number or a purchase order.
• For hourly work, give the dates and hours: "Bookkeeping, 1 to 31 March, 14 hours at £30".
• For goods, give quantities and unit prices, not just a total.
• For extras agreed on the day, say who agreed them: "Additional socket, agreed with site manager on 10 March".

A good description also protects you. If the customer later disputes the invoice, a clear description tied to a quote or an agreed change is your first piece of evidence. The guide on invoice disputes explains how to use it.

Invoice, quote, receipt: know which you are writing

Writing an invoice when the customer expected a quote, or calling a receipt an invoice, causes confusion in both sets of books. A quote offers a price before the work. An invoice asks for payment after it. A receipt confirms payment was made. A proforma invoice is an advance bill that is not yet a demand for payment. The guides on invoice vs receipt, quote vs estimate and proforma vs invoice set out the differences.

Why the due date belongs on the invoice

A due date written as a date, not only as a number of days, is the single most effective line on an invoice. It tells the customer's accounts team exactly which payment run to put you in, it removes any argument about when the clock started, and it fixes the day from which late payment interest can run for a business customer. If a business customer pays late, the law lets you add a fixed sum for each late payment, shown in the chart above, on top of statutory interest.

Mistakes to avoid

Five mistakes cause most problems with new invoices:

1. Reusing an invoice number, or restarting the count. Each number must be unique. The invoice numbering guide shows how to keep a sequence.
2. Adding VAT when you are not registered. The guide on invoicing without a VAT number covers what to show instead.
3. Leaving out the due date, so the customer applies their own terms.
4. Sending the invoice to your contact instead of the person who pays.
5. Editing an invoice after sending it. Correct it with a credit note instead; see how to correct an invoice.

After the invoice is paid

When the money arrives, record the payment against the invoice. Many customers send a remittance advice listing the invoices a payment covers. Keep the invoice and the payment record together: you must keep business records for at least 5 years after the 31 January filing deadline if you are a sole trader, as the guide on how long to keep invoices explains.

If the money does not arrive, the guide on chasing an unpaid invoice sets out the reminders to send, and for a business customer you can add statutory interest, calculated with the late payment interest calculator.