Getting a good business Invoice could be a challenge if you do business in Nigeria. You might get a receipt or a payment voucher, but a business invoice that meets global standards is critical to doing business or partnering with international clients. You must understand that when we keep whining about the government’s lack of accountability, it starts with you as an entrepreneur. And here is why you need a good invoice.
Why A Business Invoice is needed
All global organizations, for-profit or non-profit, must adhere to strict bookkeeping. Especially in Western Europe, you must show identification for services provided and the payment received. Many grant offices would go beyond to look at the bank transfer and see if it confirms the invoice you issued or received. These are a few reasons why you should consider this article. If you want to grow, you might be looking at partnering with international companies. These companies expect you to already know this basic. So the first step is to keep all the invoices you receive and copies of the ones you issue. If you do not receive any, ask for an invoice.
What Is A Business Invoice?
An invoice is an itemized list that records the products or services you provide to your client. It reflects the total amount due, date, terms if needed, and a method for them to pay you for those items or services, which in many cases as a digital transfer. Invoices can be sent as electronic or paper invoices, but we recommend you stick with electronic invoices. Why? Because you can always go back and track it. The customer cannot tell you they did not receive it. There is digital evidence you sent it.
What is the difference between a basic receipt and an invoice?
Receipts often just show you the amount and date something was paid for. But an invoice would show you what was paid for and by/to whom. Some invoices also carry terms and show tax allocation. Another difference is that an invoice is issued to get payment from the customer, while a receipt is issued after receiving the payment from the customer. This is so crucial because people confuse this. People want to send you an invoice afterwards. No! You send your invoice before payment!
Quote, Offer And Proposal Vs. Invoice
Note that at Joadre, we would not make any payments before an invoice is sent. And also, note that an offer, a quote or a proposal is not an invoice. If you send a quote or offer, it is to propose. After the client accepts and you agree on payment terms, then you send an invoice. Beneath, let’s explore the key elements that should be in your invoice. Afterwards, you will find a list of invoice generators to help you create a perfect invoice.
These 16 Elements Are Key And Must Be On Your Invoice.
- The “To” address
- The “From” address
- Email address
- Telephone number
- Invoice Date
- Due Date
- Payment details: To include the method of payment and the details like bank details or PayPal email.
- Registration Number
- Tax Identification Number
- Invoice Number
- *Account Number
- Services: Includes description of what the services or products are.
- *Quantity: Needed if you offer products.
- Service Location
- Delivery duration
Short Description Of The 16 Key Elements Of a Business Invoice
The “To” address: Who are you sending the invoice to. Their full address must include the company/organization name, street, number, postcode, city, state and country. Also, indicate the registration number or tax ID of the company.
The “From” address: Your full address must include the company/organization name, street, number, postcode, city, state and country.
Email address: Make sure to use the email where you are best reachable. Often, large companies forward these invoices to their bookkeeping, and they may want to reach out to clarify one or two things.
Telephone number: Same as with email. Remember to add your country code if you deal with international clients.
Invoice Date: The date the invoice is issued.
Due Date: The deadline to pay the invoice. This must definitely be after the invoice date.
Payment details: To include the method of payment and the details like bank details or PayPal email.
*Registration Number: If you have a company, include the registration number. For freelancers without a registration number, this does not apply.
Tax Identification Number: If you add taxes to your invoice, you must indicate your tax number. This applies even to freelancers because you have diverse tax IDs, either a VAT ID or an income tax ID.
Invoice Number: Invoices are used for bookkeeping, so yours must be numbered. You decide the numbering system, e.g. you can start from 001 and end the year with a number based on how many invoices you sent out. Your number can be a combination of a start number + month + year. You decide. But when you start a numbering system, you must adhere to it.
*Account Number: Sometimes, clients might have a unique account number you assign. If you do this, then indicate it.
Services: Includes description of what the services or products are.
**Quantity: Needed if you offer products.
**Service Location: You should indicate where the services would be offered. This might be irrelevant to those selling tangible goods and products.
**Delivery duration: If you offer a service, you must indicate when the service begins and ends. This might be irrelevant to those selling tangible goods and products.
Amount: Write the total amount in numbers and in words. Indicate Installment, if any. If items are in quantity, you might have a subtotal and indicate the overall total.
*Those asterisks are optional.
**Depends on if you offer services or tangible goods.
This list is not exhaustive, but with this, you are covered!
Here are a few invoice generators you can check out:
- From Invoice Home, you can generate free templates – Invoice home.
- Wix provides you will access to generate invoices.
- Invoice Simple provides you with the option to download and invoice.
But you can create yours with a google excel sheet and keep using it. Tip: Remember, if you are spending on behalf of a contractor, request and keep all invoices. Also, find out if the invoice should be issued in your name or the contractor’s name.
That was a quick tutorial on creating a business invoice that you can use for international collaborations. We suggest you design a template and keep using it. You can insert your logo, website and any valuable details on the template.
Connect with us, and get our app.
We created our one-stop digital incubator app to bridge knowledge and service discrepancies for African students and Savvy entrepreneurs looking to start a business. Get the app (Android version) here. For IOS users, a web app is available here at https://tribe.joadre.com. Sign up for our newsletter here to get consistent resources via email. If you want to contact us, use our contact form or consult us through the app.
Thank you for reading to the end.