Free invoice template
Effective invoicing procedures are crucial to the financial health of all contractor limited companies. Making sure that all details are correct and reflect the terms of your IT contract – with no room for query to delay payment – and ensuring you have a systematic procedure for following up non payment is something your business will rely on.
Your contract terms will lay out the details regarding how often and how much you’ll be paid. It’s worth checking what the procedure for submitting invoices is and if any specific details should be included on the invoice and anything else you need to send, such as your signed timesheet. Should invoices be submitted in a certain way (hard copy in post or email?), or to a certain person? Getting this right from the outset should ensure settlement without complication, particularly if you are invoicing a large direct client where a busy finance department will process your payment, as opposed to being paid by your direct contact at smaller firms.
At the top of your invoice:
- 'Invoice'
- Your company name
- Your address
- Your contact details
- Invoice number
- Invoice date
- Client name
- Client Address
A clear, straightforward layout, headed with the word ‘Invoice’ and followed by your business name, address and contact details, as well as the recipient’s name and address at the top, followed underneath by the description of the services/expenses and totals is key to most invoices.
Each invoice should be referenced with a unique invoice number which identifies both the invoice and the client. A standard format is an abbreviated reference to the client preceding a number which can increase each time that client is issued with an invoice, such as LLO001.
In the middle – description of services due for payment:
- The services provided, e.g. xx days at £xxx day rate.
- Net amount minus of VAT (if applicable)
- Total amount inclusive of VAT (if applicable)
- Details of expenses
At the bottom of your invoice:
- Your payment terms
- Your company’s VAT number if applicable
- Your company’s full trading name and registration number
Our contractor expenses section provides a guide on charging expenses back to your client, with particular care needing to be taken with VAT.
You should also clearly state your payment terms prominently: (1) How you expect to be paid (by cheque, made payable to xxxx and sent to xxxx) or more usually by bank transfer, so bank account number, sort code and bank name) and (2) and by when, e.g. within 14 or 30 days from the date of invoice as examples. Ask your client to use the invoice number as reference when paying.
Your company registration number should also be present, as well as your VAT registration number if your business is registered for VAT.
Putting a consistent administrative system in place for both numbering and filing your invoices will mean fewer headaches if you are ever asked to produce these at a later date.
Other elements of invoicing are down to personal preference however. Some contractors and freelancers prefer to submit their invoices in pdf format to make alterations difficult, and others add wording to their payment terms that they reserve the right to charge interest on late payment in accordance with the late payment legislation – as indeed they are entitled to - while others think this is too “provocative” when submitting an invoice.
