How to write an invoice and what to include

How to write an invoice and what to include

Cash is the lifeblood of any business and being paid on time is essential to keeping it flowing.

This starts with your invoices—documents that list the goods/services you’ve provided and how much is owed—aka the ‘bills’.

You’ll need a well-designed invoice to make a good impression on customers. And whether you’re a sole trader, limited company or VAT-registered business, you’ll need to make sure your invoices meet UK legal requirements.

Using one of our invoice templates or accounting software makes it easy to create and send professional invoices that meet these requirements, look great, and help you get paid on faster.

ln our guide on how to write an invoice, in the UK, we cover the following:

A standard (non-VAT) invoice must include:

1. ‘Invoice’

Identify the document with the word ‘invoice’ to differentiate from a quote, credit note or receipt.

2. A unique invoice number

The number must be unique to each invoice (without duplicates) for clear identification, and you must keep a record of the numbers and references used.

Using a sequential numbering system is the easiest way to manage this.

The reference can contain letters as well as numbers.

3. Your company name and address

This is different for sole traders and limited companies but essentially, your invoice details must show clearly your trading name, business address and also, where you can be contacted by the customer, in case of query or dispute.

4. The company name and address of the customer

This is standard procedure on all invoices (except simplified VAT invoices) but is important for customers who want to claim back any VAT that has been charged.

5. A description of the goods and services

When writing an invoice, make sure you include a clear description of the goods and services being invoiced for, with each service or item on a separate line for easy identification.

6. The date of supply

Known as the ‘supply date’, this is when the goods or services were issued. The supply date may be different to the invoice date but is usually within 30 days.

7. The date of the invoice

Date of when the invoice was generated and not when the goods were supplied.

8. The amount of the individual goods or services to be paid

If you have a list of items in the description, then each one will be marked with an individual amount.

9. The total amount payable

The sum total of all goods listed on the invoice.

10. Payment terms

Usually defined in your terms and conditions and agreed by your customer.

These are your terms for the length of time to pay and should be marked at the bottom of the invoice. For example, payment within 30 days.

11. Purchase order number

If your customer provides you with a purchase order number, then this should be clearly shown on the invoice.

Some customers may also require that the name of the contact person is shown on the invoice.

Asking for a purchase order is recommended as once generated this is a legally binding contract between yourself and your client/customer.

12. How to pay the invoice

List the different ways that an invoice can be paid and include the bank account references. For example, your bank sort code and account number for BACS payments.

For invoices to international customers, IBAN/BIC/SWIFT numbers should be included.

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Different kinds of invoices

Depending on whether you’re a sole trader, limited company or VAT-registered business, there are a few differences to be aware of when it comes to creating your invoices.

It’s worth noting that sole traders don’t have to include their Unique Taxpayer Reference on their invoices.

Sole trader invoices and limited company invoices

VAT-registered businesses must produce and keep copies of all VAT invoices issued, including those made by mistake or cancelled.

The invoices should contain more information than a standard (non-VAT) invoice.

There are 3 types of VAT invoice:

  • Full version—used for all supplies and amounts.
  • Simplified—used for all supply and retail supplies under £250.
  • Modified—used for retail supplies over £250.

You don’t need to issue a VAT invoice if all the goods are exempt or zero rated.

If you use the cash accounting scheme, the invoice must be stamped with the amount of cash paid and the date.

You don’t need to issue a VAT invoice if all the goods are exempt or zero rated.

VAT invoices are usually supplied within 30 days of the goods or services being delivered.

For invoices issued in a foreign currency or a foreign language, you must show the VAT payable in sterling, if the goods or services are supplied in the UK.

You should also have an English translation available for inspection by a VAT officer.

It’s your responsibility to set and agree your payment terms with your customers in advance.

Clearly state your terms on the invoice so that the recipient knows when payment should be made.

In large companies, a separate accounts department may not be aware what terms you agreed with your contact.

If you’re a small business or contractor, it’s best to use simple payment terms to avoid being misunderstood and having payments delayed.

To get the best results simply state:

“Payment due within 30 days.”

Or, be polite and use less rigid language:

“We appreciate your business. Please send your payment within 30 days of receiving this invoice.”

Payment in advance (PIA)

PIA means you require payment to be made in full before goods or services will be delivered, which is useful for new or slow-paying customers.

Net (N)

A payment term that precedes how many days the payment is due in, e.g. Net 10 means within 10 days and Net 30 means within 30 days.

Sometimes, this is shortened to N1, or N30, etc.

End of month (EOM)

This means full payment is due within the stated number of days after the month-end the invoice is issued in.

This can be worded as, “Payment due 30 days month-end” or abbreviated to “Net EOM 30”.

If your invoice were dated 5 April with the terms Net EOM 30, the full payment would be due on 30 May.

Month following invoice (MFI)

15 MFI means the full amount payable is due on the 15th of the month following the invoice date.

So, if your payment term was 15 MFI and the invoice was dated 20 January, payment would be due on 15 February.


A discount is extended on the full amount payable if payment is made within the amount of days stated.

1/10 Net 30 or 1% 10 Net 30 means a 1% discount on payments made within 10 days, otherwise full payment is due within 30 days.

Stage payment

You can agree a payment plan that offers a proportion of the full amount payable in stages.

For example, four-stage payments of 25% each or, two-stage payments of 75% and 25%.

You could also ask for part payment upfront, such as 25%, and the rest staged throughout the project to avoid risk and manage your cash flow. 

Common invoice payment methods

After being clear about how much the payment is, you need to make it easy for customers to pay you by including the payment methods you accept and bank details.

Bank transfer (BACS)

Bankers’ Automated Clearing Services (BACS) payments are electronically made payments, directly from one bank account to another.

They usually take three working days to clear into your account.

The Faster Payment Service (FPS) is becoming standard across UK banks and clear payments into your account the same day.

Invoice details to include:

  • Name of your bank: My Bank
  • Sort code: 00-11-22
  • Account number: 01234567


International Bank Account Number (IBAN) is the international version of your bank account number and allows you to receive international payments in either foreign currency or sterling.

It is used by most European countries, Australia and New Zealand, but not in the USA or Canada.

A Bank Identifier Code (BIC) or Society for Worldwide InterBank Financial Telecommunications (SWIFT) is a code to identify your specific bank.

Most banks use BIC, but SWIFT is needed for payments from the US and Canada.

Both numbers can usually be found on your business bank statement.

Invoice details to include:

  • BIC AAAAGB12345
  • IBAN: GB00 AAAA 0000 0000 0000 00

Credit or debit card

To accept card payments, you need a merchant account and a credit card reader.

For online payments, you need an e-commerce payment gateway and merchant account.

For payments over the phone, you need an online virtual terminal and a merchant account.

Due to the cost of operating a merchant account, credit card payments are only a cost-effective solution if you are expecting to take a significant amount of payments by card.

A customer can issue a chargeback to reverse a credit card transaction by claiming the item didn’t arrive or was not as described. A chargeback can be made up to 120 days after the payment transaction was made.


PayPal allows worldwide payments between two people who have PayPal accounts but various fees apply. You can also accept credit and debit card payments through PayPal.


Accepting cash payments is an option for small businesses dealing with the public but most business-to-business invoices cannot be paid with cash.

Cash is not the most secure method, as you can be exposed to counterfeit bank notes and you have the added risk of carrying cash in person when depositing at the bank.

Also, banks usually charge a counter fee for depositing cash.

Sending your invoice

Sending an invoice at the right time and in the right way will help you get paid on time.

Depending on what it is you’re selling, there are several approaches you can take.

As soon as you can. The more delayed your invoice is, the longer it will take to get paid. This is true whether you sell goods or services, but you can take finer control of timing if you need to.

When selling goods, you can request payment clears before the products are sent, ask to be paid upon receipt of the goods, or use standard terms such as Net 30.

If you’re selling services, you’ll only get paid when companies complete their payment runs. You can ask customers when this is, so that you can aim for the cut-off date. If it’s a long-term project, you can negotiate monthly payments and agree the dates that invoices are raised.

If you do this as a freelancer, it’s sometimes better to send them as soon as you begin (or even backdate them), to reduce payment delays due to the client’s rigid payment system.

No matter when you invoice, remember to double-check it for accuracy before sending.

Once you’ve got the right structure for your invoice, ask your customer for the details of the person in accounts who will be making the payment.  That way, you can chase late payments with the person who’s actually able to push them through.

Email is the standard for submitting invoices and when you send to the accounts department remember to CC your contact.

Use a document that can be universally opened (PDFs are best). Avoid Word or Excel files, as these can be reformatted by the other person’s machine and are also editable.

Get paid on time with Sage Accounting

Protect your cash flow and create personalised invoices that you can track and send reminders with just a click.

Explore Sage Accounting

Subject header

Make sure this is clear, so that the email doesn’t get lost with thousands of others in the recipient’s inbox. Try this format:

[Your company name] [Your company services/goods Invoice] [month/year]

For example,

Sparkle Design, Brochure Design Services Invoice, January 2023

Writing an invoice email

When writing an invoice email, make sure the message is clear and concise, so that paying you is as simple as possible.


Dear [Big Company],


Please find attached my invoice dated 31 January 2021 in the sum of £500 for brochure design services.

(Not essential) If you have a PO number insert here. Authorised by [the name of your contact here].

If you have any queries do not hesitate to contact me.

Kind regards

Jane Smith


Chasing late payments takes time and energy away from running your business.

To minimise this, here’s what to do before the invoice is issued:

  • Have clear terms and conditions (T&Cs) and get agreement in writing (paper signed or by email).
  • Agree your payment terms in advance as part of your T&Cs.
  • Ask for a PO number – a purchase number (PO) forms a contract between yourself and your client.
  • Ask new customers to pay their first invoice PIA.
  • For large invoices, ask for a staged payment in advance to spread risk. If payment is delayed at any stage you can cease work to avoid risking further cost.
  • Make your payment method easy—BACS is the best.
  • Get the name and contact details of the person responsible for making your payment.
  • Keep on top of your invoices and issue reminders as soon as the due date is passed. Don’t ever leave late payments hoping they will get paid without asking.

Chasing up a late payment shows you’re a professional business owner and expect to be treated as one. If you have a payment that is overdue, follow our guide on how to recover an unpaid invoice.

To help manage your time better you can use accounting software that sends professional invoices as you process orders and takes payments directly from your invoices.

Alternatively, you can use our invoice templates to create and send professional invoices that look great and meet the current UK legal requirements.

This will leave you with more time to focus on what you do best: running your business.

Editor’s note: This article was first published in March 2018 and has been updated for relevance.

Professional invoice templates

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