How to write an invoice

What is an invoice?
How do invoices work?
When are invoices issued?
How to write an invoice
What to include on an invoice
How to structure an invoice
Invoice example
How to send an invoice
How long do invoices take to process?
Do I need to add VAT on my invoice?
What to do with overdue invoices

Help on how to create an invoice

An invoice doesn’t have to be complicated, but there are essentials to include. These can apply whether you're a sole trader, a partnership, or a limited company, and whether you invoice regularly or only occasionally.

This guide covers the key information to include when creating an invoice template — helping you stay organised, improve your record keeping and make it easier to get paid on time.

What is an invoice?

An invoice is a formal request for payment for the goods or services you’ve provided. It should clearly outline the details your customer needs so they can pay you by the due date.

If both you and your customer are VAT registered, issuing invoices is a legal requirement. Even if you’re not VAT registered, it’s still good practice to create, store and track invoices. Doing so supports accurate accounting and tax reporting — and helps present a more professional image to your customers.

How do invoices work?

Once you’ve written an invoice, issuing it is the first step in requesting payment. At its core, an invoice tells your customer what they owe, what it’s for, how to pay and when it’s due. You can create invoices manually or use invoicing software, usually after you’ve delivered the product or service.

If your customer has all the information they need, they can pay using the methods you’ve set out. Invoicing software also lets you send automatic payment reminders, helping you stay on top of what’s due.

After the invoice is paid, record it in your ledger. And remember: an invoice is not a receipt — a receipt is issued only once payment has been made.

When are invoices issued?

It’s up to you when you send an invoice, but it’s best to issue it as soon as you’ve delivered the product or service. Prompt invoicing lets your customer know payment is due and helps keep your cashflow healthy.

There are exceptions, depending on the work you do and what you’ve agreed with the client.

For example, if you work on a retainer, you might invoice on a regular schedule — such as monthly — rather than immediately after delivery. If the customer has agreed to pay upfront, you’ll typically invoice earlier in the process.

The first step in writing an invoice is creating your template. A good invoice template should include all the key information your customer needs and make your payment terms clear. Here’s a simple place to start:

What to include on an invoice

You will want to include the following when you write an invoice:

1. Invoice date
   The date the invoice is issued — this may differ from the date the work was completed.
2. Invoice number
   A unique, sequential number (e.g., 10001, 10002, 10003) to help you track each invoice.
3. Purchase order (PO) number (if applicable)
   A reference some customers require for payment approval.
4. Your business details
   Include your name or trading name, email address and postal address.
5. Customer details
   List the client’s name and contact information. You may also want to add a key contact’s name.
6. Supply date
   The date you delivered the goods or services — useful for showing the gap between work and billing.
7. Description of goods or services
   Provide a clear breakdown of what you’re charging for, including hourly rates, quantities or line items.
8. Total amount due
   State the exact amount owed. Make it clear whether the total includes VAT, and show the VAT rate and VAT amount if applicable.
9. Payment terms and details
   Include the due date, payment methods (such as bank account number and sort code) and any late payment fees.

Sole traders vs limited companies

Invoice requirements vary slightly depending on whether you are a sole trader or a limited company.

• If you run a limited company, include your full registered company name exactly as it appears on your Certificate of Incorporation.
• If you are a sole trader, include your full name, any trading name and a correspondence address.

How to write an invoice template

You can use a free online invoice template or one included with invoicing software, then customise it to suit your business — adding your logo, branding or even a short thank you message in the footer. When it comes to the layout, invoice details typically appear in the following order (where relevant):

• Company logo
• Company name and address
• Company registration number
• Date of supply
• Customer’s name and address
• Invoice number
• Purchase order (PO) number
• Date of invoice
• Breakdown of costs
• Total due
• Payment details and terms

Whatever format you choose, make sure your invoice is clear and instantly recognisable as an invoice.

Assign each invoice a unique, sequential number (for example, 10011, 10012, 10013) and keep track of its status — whether it’s issued, awaiting payment, overdue or paid.

Consistency in your numbering system and naming makes record keeping far easier and helps you stay organised.

Invoice example

You can send invoices by email or through invoicing software, though some customers may still prefer a posted copy.

Using invoicing software can make the whole process faster and more efficient. It often includes built in payment options, automation tools and a secure environment for handling customer details. Some platforms also integrate with contract management tools and your business bank account.

If your business is VAT registered, you must keep digital invoice records that are compatible with HMRC’s Making Tax Digital software, so you can submit VAT returns digitally.

Processing times vary from customer to customer. Some have smooth, efficient approval workflows — others may take longer to recognise, review and authorise your invoice.

You can help speed things up by making sure your invoice is accurate and includes all the information your customer needs for payment and approval.

In most cases, invoices are paid within 30 days of being issued (unless you’ve agreed different terms), and the customer’s internal processing should fall within that timeframe.

Do I need to add VAT on my invoice?

You only need to charge VAT on your invoices if both you and your customer are VAT registered. Make sure you clearly show the VAT rate, the amount charged and the VAT inclusive and VAT exclusive totals. Your VAT registration number must also appear on the invoice.

You must register for VAT if your turnover exceeds the VAT threshold within the past 12 months. You can also choose to register voluntarily if it benefits your business — for example, if you want to reclaim VAT on your own purchases.

What to do with overdue invoices

Not all customers pay on time, so it’s important to keep clear records and track outstanding invoices — especially if you work with multiple clients. Automated invoicing software can make this much easier.

You’re legally entitled to charge interest on late payments if you choose to. You can include this in your payment terms, but you’re still able to claim interest even if it wasn’t stated upfront.

Start by communicating with your customer. A polite reminder by email or phone is often enough to prompt payment and maintain a good working relationship.

If reminders don’t work, you can issue a statutory demand, which gives the debtor 21 days to pay or agree a repayment plan before you consider court action.

Whatever steps you take, keep detailed records of all communication and the payment terms you originally set out.