How To Invoice Your Clients Correctly - Our Helpful Tips

Sending a correct invoice is all part and parcel of delivering a professional service to your clients and running your limited company compliantly.

It’s worth taking the time to understand what information to include in your invoice and adopting a layout so it’s easy for your clients to use.

If you’re using FreeAgent, which is included in our contractor accountancy packages, you can select from a choice of invoice templates. See these helpful guides on how to set up your first invoice in FreeAgent, or you can contact us for help and support. Once you’ve got the invoice template set up you can simply replicate the invoice template each time you need to send an invoice. Done properly, you’ll project a professional image and provide the information your clients need to pay you accurately and on time, avoiding unnecessary hassle with misunderstandings and delays.

What information must you include on your invoice?

HMRC requires particular details to be included on every invoice you issue.

• A unique identification number
• Your company name, address and contact information
• VAT registration number (if VAT registered)
• The company name and address of the customer you’re invoicing
• A clear description of what you’re charging for
• The date the goods or service were provided (supply date)
• The date of the invoice
• The amount(s) being charged
• VAT amount (if applicable)
• The total amount owed

Sole trader invoices If you’re a sole trader, the invoice must also include:

• Your name and any business name being used
• An address where any legal documents can be delivered to you if you are using a business name

Limited company invoices

• If your company is a limited company, you must include the full company name as it appears on the certificate of incorporation as well as your company registration number.
• If you decide to put names of your directors on your invoices, you must include the names of all directors.

Good practice tips

1. Make sure you have written agreements before you begin work regarding the charges and deliverables. Clarity from the outset avoids problems and confusion when it’s time for invoices to be paid.
2. Make sure you know who you’re sending your invoices to. This will probably be different to the person/people you are delivering services to. You’ll need email addresses and contact details for the person/team that’s going to process your invoice.
3. Itemise the service you’re charging the client for. There are no set rules but it’s a good idea to put detail on your invoices so your clients understand what services the invoice relates to.
4. Avoid cashflow headaches by sending your invoice as soon as the project is complete.
5. Include payment terms to specify how and when you would like to receive payment. For example: ‘Payment should be made within 30 days using the following bank details…’.
6. Keep unpaid invoices separate from those that have been paid – that way you can easily track what money you’re owed.
7. Set aside time at the end of each week and month to keep your financial records in good shape. (FreeAgent does this for you, this article shows you how to see your aged debtors report: debtors report)

We appreciate that managing your business finances may not be your favourite thing to do. That’s why our great contractor accountancy packages include everything you need, coupled with tailored support from your named accountant. You can get in touch at any time for support with setting up and managing your invoicing. Our service also includes:

• Quick 24-hour bank account set-up
• FreeAgent bookkeeping software
• Tax efficient, proactive advice
• Monthly payroll for up to 2 employees
• MTD VAT submissions
• Year-end accounts
• Corporation Tax return
• Self-assessment tax return
• Registered office address, if needed

Find out more about our accountancy packages specially designed for busy contractors.