A sales invoice template is used by sales professionals or anyone running a business that depends on sales. They require it to collect payment from customers. The invoice should accurately capture all the details such as the item sold, the amount owed, discounts, applicable taxes, and more.
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What is a sales invoice?
A sales invoice is just like a receipt but it demands payment instead of indicating that payment has been paid. Businesses usually use sales invoices to indicate an item as paid or unpaid. Along with the purchased item, the sales invoice is also shipped physically to the customer’s address. The main purpose of sending this invoice is;
- To show proof of transaction
- To indicate that the tax amount can be calculated if sent to a country with a VAT
Why should businesses send a professional and well-designed sales invoice?
Businesses that depend on sales should send a professional and flexible invoice that captures all the details like prices, quantities, shipping costs, etc. Ensure that your invoice is clear and easy to read so the customers know what they are receiving and what they have to pay for. This is specifically important if you are charging for several items or a mixture of goods. Furthermore, this will make it easier for you to see the products or services that are selling the most.
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The essential components of a sales invoice:
Your sales invoice should include the following essential components;
Title and description
First, you have to specify the name of the project. Next, describe what type of product or service your customer is being invoiced for.
Company details
At the top right corner of your invoice, add your company name, address, phone number, and logo.
Customer details
Provide your customer’s name, address, and contact details under ‘Bill To’.
Invoice number
If you want to track down this invoice in the future then include a unique invoice number. Depending on the sequence and your customers, you can format this.
Dates
Specify the dates that indicate when your invoice has been issued and when payment is due.
Line item
For each unique good or service you provided, add individual line items. Include the following details for each line item;
- Brief Description
- Quantity
- Individual unit price
- Total price
Subtotal
Before applying the tax, add up the subtotal of your goods or services.
Tax
Mention the tax amount applied to the subtotal. Depending on where you run your business, the tax rate may vary.
Total
After adding the tax amount to the subtotal, outline the total amount due.
Notes
You can provide details regarding terms of service and payment terms and any additional information your customer must know.
When to send a sales invoice?
Usually, most e-commerce businesses ask for payment at the time of purchase. However, you may ask for a percentage of the price upfront in case of a large order or a service to be performed in the future. In case of a regular, ongoing service or product order, you can have an invoicing schedule in place to ask for payments.
Bill of sale Vs. Sales invoice
A bill of sale is a document that serves as proof the payment was made and received by the seller. It is generally required by law when purchasing an item. On the other hand, a sales invoice demands payment that the buyer has to pay after receiving the purchased item.
FAQ’s
Yes, a sales invoice is a legal document that provides a formal record of a transaction. The seller and the customer can use this document for legal purposes. It provides the essential details including the items sold, the amount due, payment terms, and more.
A seller or a company providing the product or services usually prepares the sales invoice.
