How to create an invoice

The eight things every invoice needs

An invoice is a payment request that also has to survive being filed, audited and possibly disputed months later. That dual purpose is what drives the standard set of fields.

1. The word “Invoice”, so it is not mistaken for a quote or a receipt.
2. A unique invoice number, used by both sides to reference the transaction.
3. The invoice date, and separately a due date.
4. Your business name, address and contact details, plus your tax number if you are registered.
5. Your customer’s name, company and billing address.
6. A line for each item or service: description, quantity, unit price, line total.
7. The subtotal, any discount, any tax broken out by rate, and the final total due.
8. How to pay — bank details, a payment link, or a QR code — and your payment terms.

Step 1: Add your business details

Use the legal or trading name you actually invoice under, not an abbreviation. Include an email address that you monitor: the majority of invoice queries arrive by reply, and an unanswered query is an unpaid invoice. If you are registered for VAT, GST or an equivalent, your registration number belongs here — in most jurisdictions its absence makes the document invalid as a tax invoice.

Step 2: Add your customer

Invoice the legal entity you contracted with, not the individual you dealt with. For larger organisations that distinction determines whether your invoice can be paid at all. If your customer is tax-registered and you are issuing a tax invoice, include their registration number too.

Step 3: Number it properly

Invoice numbers should be unique and sequential, with no gaps. A gap looks like a deleted invoice to an auditor. A simple running series (INV-1001, INV-1002) is enough for most businesses; adding a year prefix (2026-001) makes year-end reconciliation easier.

Step 4: Write the line items

Each line should be specific enough that someone who did not commission the work can approve it. Compare “Consulting — 12 hours” with “Pricing model review and workshop facilitation, 12 hours @ £120”. The second gets paid faster because it answers the approver's question before they ask it.

Step 5: Apply tax and discounts in the right order

If your invoice has both a discount and a tax, apply the discount first and calculate tax on the discounted amount. Tax is charged on the consideration actually paid, so calculating it on the pre-discount figure overstates the tax and overcharges your customer. A £1,000 line with a 10% discount and 20% VAT is £900 net, £180 VAT, £1,080 total — not £1,200 less a discount.

Step 6: State the payment terms and due date

“Due on receipt” is weaker than a specific date, because it has no clear breach point. Put an actual due date on the invoice and state the terms in words as well (“Payment due within 14 days”). If you charge late fees, say so here — you generally cannot apply a penalty that was never disclosed.

Step 7: Send it to the right person

At anything larger than a sole trader, the person who hired you is rarely the person who pays you. Send the invoice to accounts payable and copy your day-to-day contact. If your customer issued a purchase order, quote the PO number — invoices without one are routinely parked without anyone telling you.