The most exciting part of starting any business is when you make your first sale. Once the celebrations die down you will need to be professional and provide your customer with an invoice as soon as possible.
I have created a simple-to-use excel template which you can use as your invoicing template until you have enough volume to go and get a software package to do the job for you.
This template is tailored towards Irish sole traders and small companies and already is set up to take into account all of the relevant Irish VAT rates.
Here is a quick sneak peek of exactly what the invoice looks like.
Who is this invoice template suitable for?
This invoice template is really suited to freelancers and small businesses that are starting out and have low levels of sales that don’t yet justify subscribing to a full accounting package.
Cash flows can be tight when you start your new business, most business owners will initially focus all their cash on where it can best benefit their business. Whether that be advertising, stock, etc.
A subscription for the likes of Sage will set you back around €12 + VAT per month for their product tailored for freelancers and €27 + VAT per month for a more well rounded product suited to small businesses. You can get yourself 3 free months
Key Elements of an Invoice
Even if you don’t run a business you will be well aware of what generally you should find on an invoice. It may seem like something very small and inconsequential but having your invoice correctly set up with the correct information can save you a lot of headache and admin work. Here are a few key things to get right:
Cash is king for all businesses, therefore you need to be careful when you are setting your credit terms for your customers/clients because they will take advantage of every day you give them.
Don’t set payment terms that are way too long that it is going to affect your own operations. The longer the period, the more likely they will forget about the money they owe you and then you will have the added work of chasing them for payment.
Following on from the previous point, having full and clear payment instructions can save you even more admin. You cannot be too detailed when it comes to adding in your bank details such as IBAN, BIC, Sort Code, Account Number, Bank Address and Bank Name.
Your customers will have many different banks and each bank may have different criteria that they require when the customer is trying to set you up as a Payee, so try and make it as painless a process as possible for you. A simple thing like missing information could delay payment an additional couple of days.
If your business is registered for VAT, then attention to detail is very important in how you prepare your invoices as you have to make sure the appropriate VAT rates are applied and that you have clearly displayed your VAT number and your Customers VAT number (where they are also VAT registered) on the invoice.
These invoices will form the basis of your VAT returns therefore they will need to be reliable and could potentially be audited in the future by the Revenue Commissioner (who you want to keep on your side).
Disclaimer: This blog post is for informational and educational purposes only and should not be construed as financial advice.