So you’ve set up your own business and made your first sale. Now it’s time to create an invoice and send it so you can get paid and get some cash flowing into your business.
It’s important that you send the invoice promptly and keep on top of your business accounts.
This will encourage your customer to pay you on time and, if you get into this good business habit, you won’t have a mountain of invoicing to do at the end of every month.
If you are charging VAT, a VAT invoice must be issued within 15 days of the end of the month in which the goods or services are supplied.
If you’ve never produced an invoice before, you might be wondering how to go about this and what needs to be on the invoice in order for it to be accepted by your customer and their accounts department.
If you’re registered for VAT and are therefore charging VAT on your invoices, it is especially important that your invoices are properly drawn up and that you keep copies so you don’t incur any penalties from Irish Revenue.
Try following an Irish invoice template to make sure you include all the required details.
Read to create an invoice? Here’s what needs to be on it, along with some tips to ensure you maximise the opportunity than an invoice provides your business.
What you need to include on an invoice
- The date of issue of the invoice.
- An invoice number, which uniquely identifies the invoice.
- The full name, address of you or your business (whoever supplied the goods or service being invoiced for).
- If you are registered for VAT, you need to include your VAT registration number.
- The full name and address of the person or business to whom the goods or services were supplied.
- The quantity and nature of the goods supplied or the extent and nature of the services supplied.
- The unit price, exclusive of tax, of the goods or services supplied, any discounts or price reductions not included in the unit price, and the consideration for the supply exclusive of VAT.
- The date on which the goods or services were supplied.
- Any discounts or price reductions not included in the unit price.
- The amount which is charged exclusive of VAT taxable at each rate (including zero rate) of VAT and the rate of tax chargeable.
- If you are charging VAT, the amount of VAT payable.
- The total amount payable.
- If you are supplying goods or service to a large company or government body they may require that you put a purchase order (PO) number on this invoice. They will supply you with the PO number when they order the goods or services.
- If you trade outside of Ireland, VAT invoices issued in a foreign currency must also contain the corresponding figures in euros.
- Remember to keep a copy of your invoices for six years after they are produced as this is a requirement of Irish Revenue.
Here is a sample invoice for someone that is charging for a product.
6 tips for creating and sending out invoices
- Ensure all of the information is presented in a clear and legible manner. Laying your invoice out using a table can help with this. Upon opening the invoice, your customer should immediately be able to see the invoice number, the due date and the total amount due. Using accounting software can ensure you produce a professional looking and well laid out invoice.
- Include your business logo and branding on the invoice so your customer instantly recognises who the invoice is from. A professionally produced invoice will be taken seriously by the customer and communicates that you mean business.
- Payment options and terms should be included at the bottom of the invoice. This will encourage your customer to pay promptly. Try to include a few different methods of payment and if you allow payment by bank transfer, include all of your bank account details that your customer will need to make the payment.
- Include details about the goods or services supplied and don’t be vague as this will reduce the possibility of your customer querying the invoice, which could delay payment.
- Include your contact details such as telephone number, email address and website.
- Invoices can be posted or emailed, or both. If you are posting the invoice, use a distinctive envelope and print the invoice in colour so that it will stand out later when the customer is looking for it in their pile of papers. If you’re emailing the invoice, keep in mind that you might want to post a paper version also in case the emailed version gets lost in your customer’s junk email folder.
Using accounting software for invoicing
Good accounting software will take the hassle out of invoicing. You can use it to create and email invoices directly to your customers. You’ll no longer have to wait until you get back to the office; you can simply invoice your customers on the spot if you want to.
With good quality accounting software, you can customise your invoices. There may be several invoice templates to choose from, including a VAT invoice template, where you can easily add your company logo, association badges or useful text such as bank details and payment terms.
This will help you to be confident that you provide your customers with professional VAT-compliant invoices.
It makes sense to use an invoice template Ireland accepts in all businesses and most importantly by Revenue.
And, by using good accounting software for your invoicing, the invoice will be automatically recorded in your accounts, so at the end of the month, you’ll know every invoice you have issued will have already been accounted for.