Free and simple invoice template for your business

Invoices: The Essentials

Make the most of your invoice template with these quick tips.

• What is an invoice?

  Put simply, an invoice is a commercial document that includes an itemized list of products and/or services that a business or seller provides to a customer or buyer. An invoice should include the price of each item being sold, a subtotal, and any added taxes, as well as clearly communicate the total price of all items. Invoices are commonly used by small businesses, freelancers, independent contractors, or even larger enterprises.

  In recent years, online invoicing and payments has become a preferred method for both businesses and customers. Platforms like HoneyBook make it easy to get started with online invoices for free.

• How do you make an invoice?

  The easiest way to make an invoice is to start with an invoice template and use an online invoice generator like the one above. Most free invoice templates give you the ability to add items and prices, while more advanced invoice templates allow you add custom content like your business' logo, branding, and contact information. The main body of an invoice is made up of what are referred to as "items," or the product, goods, or services being sold. Need more info? Check out our breakdown of how to create an invoice . For sending invoices in the United States, be sure to include sales tax, so that you are in accordance with state tax regulations. If you need a hand, you can find your state's current sales tax rate here . A smart invoice template will automatically calculate your grand total from the subtotal (sum of all items) plus the added tax. Keep reading for more specific details on formatting an invoice.

• How do you format an invoice?

  Formatting an invoice is fairly standard besides some built-in differences based on industry and preference. For photographers, consultants, designers, freelancers, and any small businesses who favor a more branding on their invoice, adding a header image and logo at the top of the document is a nice option. For all invoices, regardless of industry, essential business information, like address, phone number, and email address should be toward the top of your invoice template, along with the customer or recipients information name (ie: "Bill to" Jessica Smith).

  The body or main section of an invoice should be an itemized list with item names left-aligned and a description under each one. Adding descriptions gives your customer more clarity into the specifics of each cost and give your invoice a professionally detailed finish.

  Next, corresponding prices for each item should be places across from each item title, right-aligned on the invoice page. In the end, all item prices should form a right-aligned column.

  Finally, the subtotal, or the pre-tax sum of all prices, should sit below the column of prices. The sales tax rate should follow directly beneath subtotal, and it is often helpful to show both the tax rate and the dollar amount (i.e.: for an invoice with a subtotal of $100, show 7.25% and $7.25). Last but not least, the grand total sit at the bottom right corner of the invoice and summarize the subtotal plus added tax.

  Sticking to this common invoice format provides a consistent and easily understandable experience for clients, which means fewer late payments for you! Take a look at the invoice template examples above for more examples or check out our deep dive on how to create an invoice .

• What is the difference between a purchase order, bill and an invoice?

  A purchase order (commonly abbreviated as PO) is a document that lists the products or services a buyer agrees to purchase from a "supplier," or seller. In commercial business transactions, the buyer will produce a PO, which will clearly list the types, quantity, and price at which they will buy goods or services. PO's often help track inventory and facilitate repeat purchases.

  Alternatively, an invoice is a commercial document sent from business to customer listing the price and quantity of previously agreed upon goods or services. Similar to an invoice, a bill summarizes charges for goods or services, and is presented to the customer by the seller.

  Thus, the main difference between a purchase order, invoice, and bill is that a purchase order is initiated by the buyer, whereas invoices and bills are initiated by the seller.

  Looking for a PO template? Try SmartSheet .

• What should I look for in an invoicing software?

  Creating an invoice is pretty simple, but finding a good invoicing software can be a tougher task. A great software can mean the difference between getting paid on time and spending hours collections thousands in outstanding payments.

  Here are five key things to look for in an invoicing software :

  Flexible invoice templates: In order to save time, look for a software with plug-and-play templates that you can save online for your records, duplicate for new customers, tweak as needed and send easily. For on-the-go invoicing, take a look at mobile invoicing on the top-rated HoneyBook app (available on iOS and Android ).

  Online payments: Sending an invoice is only the first step in collecting money from clients or customers. Allowing customers to immediately pay online via credit card or bank transfer increases your likelihood of getting paid quickly and on time. Online payment software like HoneyBook enables clients to review, sign, and make payments quickly and easily online, from any device.

  Payment scheduling: For freelancers and small businesses that charge retainers or collect multiple payments, the ability to set up a payment schedule is critical. A great invoicing software will allow you to pre-define a payment schedule and prompt your client to pay on scheduled dates. HoneyBook, for example, allows businesses to divide payments by percentage (ie: three payments of 33% each, where $1500 is broken up into $500 payments) or lump sums (i.e.: three payments, where a $500 retainer is the first payment, followed by two $200 payments). Learn more about online invoices and payment schedules .

  Automated payment reminders: Invoicing software with automatic payment reminders can save critical amounts of time and business-saving amounts of money. Take it from this photographer who used payment reminders on HoneyBook to recover $14,000. HoneyBook allows users to send up to three automatic reminders - seven days before a payment is due, one day before a payment is due and two days after a payment is due. Learn more about setting up payment reminders here .

  A friendly integration with Quickbooks: Invoicing software that integrates with Quickbooks by Intuit helps consolidate your transactions and bookkeeping into one business platform. HoneyBook seamlessly integrates with three versions of Quickbooks (Plus, Essentials, Simple Start) in the U.S. and Canada. When using HoneyBook and Quickbooks, your invoices will automatically sync to your Quickbooks Online account, as soon as a customer submits a payment. If you have multiple payments making up one invoice, your Quickbooks will update after each payment. Learn more about integrating HoneyBook with QuickBooks .