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How to create an invoice: Step-by-step guide with tips and example

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If you’re running a business, knowing how to create an invoice is essential for staying organized and getting paid on time. Whether you’re just starting out as a freelancer or managing an established company, sending a clear and accurate invoice helps maintain professional relationships and ensures healthy cash flow.

In this article, you’ll learn everything about how to create an invoice, with a practical example and helpful tips.

Table of content:

Why is creating an accurate invoice important?

An invoice is more than just a request for payment. It’s a formal record of the transaction and proof of income for tax reporting purposes. If your invoice contains errors or missing information, it can lead to payment delays or issues with tax authorities.

That’s why learning how to create an invoice properly is key — especially if you’re billing as an individual and need to understand what’s legally required.

What should be included in an invoice?

Creating an invoice template that meets legal standards helps streamline your workflow. A professional invoice should include:

  • Your business name and address
  • Client’s name and address
  • A unique and sequential invoice number
  • Invoice date and due date
  • Clear description of products or services provided
  • Itemized costs and applicable taxes
  • Total amount due
  • Payment instructions (e.g., bank details, terms)

If you’re not registered for sales tax or VAT, make sure to state that clearly on the invoice.

Visit our page about invoice requirements for more information.

Wondering how you create an invoice number?

Keep it sequential and unique (e.g., 2025-001, 2025-002) to maintain a clear record.

4 steps to create an invoice

1. Gather all the necessary information

Before you begin, make sure you have the client’s full details, project description, and agreed-upon rates or pricing.

2. Choose a format or tool

You can use Word or Excel, but these are prone to mistakes. The best way to create an invoice is with invoicing software that automates calculations and numbering.

If you’re on the go, you might ask: Can I create an invoice on my iPhone? Yes, many invoicing apps let you generate and send invoices directly from your mobile device.

3. Double-check before sending

Make sure the totals are correct, tax is calculated properly, and all required details are present. Small errors can lead to big delays.

4. Send and follow up

Send your invoice in PDF format via email and track payment status. Include a polite reminder of the due date and follow up if needed.

Example invoice

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Let Payt handle the follow-up

While knowing how to create an invoice is important, managing unpaid invoices is just as critical. That’s where Payt comes in.

Payt is specialized accounts receivable software that helps you:

  • Automatically follow up on overdue invoices
  • Send reminders on your terms
  • Gain insight into payment behavior
  • Get paid up to 50% faster

With Payt, you stay in control without sacrificing customer relationships.

Curious what Payt can do for you? Download our brochure below or schedule a demo right away.

Frequently asked questions

Yes, for occasional freelance work, but be sure to include your personal details and clearly state that you’re not tax-registered.

Start with a simple template. Include all key fields like invoice number, date, item description, and total due.

You can, but it’s easy to make mistakes. Using invoicing software helps ensure accuracy and saves time.

If you’re not required to collect tax, clearly state this on the invoice: e.g., “No sales tax due” or “Tax-exempt.”

A proforma invoice is a preliminary invoice used for customs or informational purposes. It’s not a request for payment, but it outlines what will be delivered.

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By Xindu Hendriks

Xindu is an expert in digital strategy and accounts receivable management at Payt. She is known for her analytical approach.

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