How to Invoice: A Complete Step-by-Step Guide (2025)
Invoicing is how you get paid. Whether you're a freelancer sending your first invoice or a business owner trying to get paid faster, this guide covers everything โ from what to include to what to do when clients don't pay.
1. What is an invoice?
An invoice is a document you send to a client requesting payment for goods or services you've provided. It's both a payment request and a legally binding record of the transaction.
Key things an invoice does:
- โFormally requests payment from a client
- โCreates a legal record of the transaction
- โSets out the payment terms (due date, amount, payment methods)
- โCan be used as evidence in a dispute
- โForms the basis for your accounting and tax records
2. What to include on an invoice
The exact requirements vary by country, but a professional invoice should include:
| Field | Required? | Example |
|---|---|---|
| Invoice number | โ Yes | INV-2025-042 |
| Invoice date | โ Yes | 15 May 2025 |
| Your name/business name | โ Yes | Jane Smith Consulting |
| Your address | โ Yes | 123 High Street, London EC1A 1BB |
| Client's name and address | โ Yes | Acme Corp, 456 Business Park |
| Line items with descriptions | โ Yes | Website design โ 20hrs @ ยฃ75/hr |
| Amounts (per item and total) | โ Yes | ยฃ1,500.00 |
| VAT/Tax (if applicable) | Depends | 20% VAT = ยฃ300.00 |
| Payment due date | โ Yes | 14 June 2025 (30 days) |
| Payment instructions | โ Yes | Bank transfer to Sort 20-00-00 Acc 12345678 |
| Your tax/VAT number | If registered | GB 123 4567 89 |
3. How to create an invoice
You have several options, from simple to sophisticated:
Option 1: Use invoicing software (recommended)
Tools like Chaser, QuickBooks, or FreshBooks generate professional PDFs automatically, track who's paid, and send automatic reminders.
Option 2: Use a Word or Google Docs template
Download a template, fill in the details, save as PDF, and email it. Works fine for a small number of invoices.
Option 3: Use a free online invoice generator
Fill in a form, download the PDF instantly. No signup required with many tools.
4. How to send an invoice
Email is the standard method. Save your invoice as a PDF and attach it. Here's a professional template:
Subject: Invoice INV-2025-042 from [Your Name] โ ยฃ1,800.00 due 14 June
Hi [Client Name],
Please find attached invoice INV-2025-042 for [description of work] completed in May 2025.
Amount: ยฃ1,800.00
Due: 14 June 2025 (30 days)
Payment: Bank transfer to [Sort code] / [Account number]
Let me know if you have any questions.
Best,
[Your Name]
Best time to send: Tuesday to Thursday, before 11am. Avoid Friday afternoons โ invoices sent then often get dealt with Monday, already a day late in your client's mind.
5. Payment terms explained
| Term | What it means | Best for |
|---|---|---|
| Due on receipt | Payment immediately on receiving invoice | Small amounts, new clients |
| Net 7 / 7 days | Payment within 7 days of invoice date | Regular clients, small projects |
| Net 14 / 14 days | Payment within 14 days | Standard freelance terms |
| Net 30 / 30 days | Payment within 30 days | B2B, corporate clients |
| Net 60 / 60 days | Payment within 60 days | Large enterprises (push back if possible!) |
| 50% upfront, 50% on delivery | Split payment | New clients, large projects |
๐ก Tip: Shorter payment terms are almost always better. If you offer Net 30, many clients will take all 30 days. Start with Net 14 as your default and only move to Net 30 for established corporate clients who require it.
6. What to do if a client doesn't pay
Late payment is frustratingly common โ 50% of UK B2B invoices are paid late. Here's what to do:
Day 3: Friendly reminder
A polite nudge โ many clients simply forget. Reply to your original email with "Just following up on my invoice..."
Day 7: Firm follow-up
Ask directly: "Can you confirm when payment will be made?" Keep it professional but clear.
Day 14: Urgent notice
Mention potential late payment fees and that you may need to pause ongoing work if unpaid.
Day 30: Final demand
Formally state this is a final demand. Mention potential debt collection and statutory interest (8% + base rate in the UK).
Day 30+: Escalate
Options: small claims court (England: moneyclaim.gov.uk, max ยฃ10k), debt collection agency, or a solicitor's letter.
๐ฎโ๐จ Skip the awkward follow-ups
Chaser sends all 4 reminder emails automatically โ politely but firmly โ so you don't have to. Users get paid 14 days faster on average.
Try Chaser free โ7. Tips to get paid faster
Invoice immediately after delivery
Don't wait until end of month. The sooner you invoice, the sooner the payment clock starts.
Make payment easy
Include your bank details, PayPal, or a payment link. Every extra step to pay reduces your chances of prompt payment.
Use short payment terms
Net 14 instead of Net 30. Corporate clients often pay early if the terms are shorter.
Add late payment fees
State in your terms that overdue invoices accrue interest (in the UK: 8% + Bank of England base rate per annum).
Send payment reminders
Don't wait for the due date to pass. A reminder 3 days before the due date can dramatically improve on-time payment rates.
Get part payment upfront
For large projects, take 25-50% before starting. This screens out bad clients and improves cash flow.
Use invoicing software
Automate reminders, track open/unpaid invoices, and generate PDF invoices in seconds.
Frequently asked questions
Do I need to be VAT registered to send an invoice?
No. Any business can send invoices. If you're VAT registered, you must charge and display VAT. If not, you just charge your net price โ no VAT.
What format should an invoice be in?
PDF is the professional standard. It preserves formatting across all devices and can't be accidentally edited.
Can I send an invoice via WhatsApp or text?
Technically yes, but email is the professional standard and creates a cleaner paper trail for disputes and accounting.
What's the difference between an invoice and a receipt?
An invoice is sent before payment, requesting money. A receipt is sent after payment, confirming money received.
How do I number my invoices?
Use a sequential system: INV-001, INV-002, or with year: INV-2025-001. Never reuse numbers and never skip them โ gaps can cause accounting issues.
๐ Invoice + auto-chase in one tool
Chaser creates professional PDF invoices and sends escalating payment reminders automatically. Free for 3 invoices.
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