Getting your invoicing system and payment terms right can be the key to a healthy cash flow - so the itsettled team lay out the best method for invoicing.
This guide outlines the information you are required by law to include in an invoice. Looking to write your invoice terms & conditions? Find our guide for Terms & Conditions as well as setting payment terms here.
All invoices should clearly state that this is what they are with the word "invoice".
Here’s the information that invoices need to contain;
In addition, if you are a limited company, sole trader and/or VAT registered, the law requires you to provide certain information on any invoices you send to your customers.
Limited companies must have the following additional information on their invoices:
Limited companies may include the names of the directors on their invoices. However, if you are going to publish this information on your invoices, you must include the names of all directors.
A sole trader must have the following additional information on their invoices:
If you are registered for VAT, whether the business is a limited company or a sole trader, you must also put the following information on your invoices:
It's best to set up records and invoice correctly for VAT from the time your business starts. You may find it useful to set up a pro forma invoice. A pro forma invoice can be an invoice drawn up by you and sent to the buyer to confirm the details of a contract, or a polite reminder to the buyer that a debt will be due for payment.
You can also add additional information to your invoices as you see fit to avoid delays in them being approved for payment.
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