Find out what goes on an invoice

Ensure that your invoices are legally compliant and ready for payment

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In order for a document issued to your customers to be legally recognised as an invoice, it must contain certain elements prescribed by law: from your business address to issue date, payment terms to VAT amount, and much more. The guide to below explains each points in plain language.


Always call an invoice an ‘invoice’

You might think that putting prices and amounts on a sheet of paper automatically counts as invoicing but legal authorities and those old school folks at your client’s accounting department won’t consider a document an invoice until it clearly displays the word ‘Invoice’.

This is done to distinguish actual invoices from other types of documents that also display amounts owed and related information, such as pro-forma invoices, receipts, delivery notes, orders, quotes, credit notes or just simple business correspondence.

So start with the most important step first – clearly state that the document you are sending is an invoice.

Include company details

No matter how familiar you are with a customer (and vice versa), always include your own and your customer's business name, an address where documents can be delivered to and relevant bank details.

Legal authorities should be able to reach the customer and supplier based on this information, so make sure your invoice contains all the correct details.

If you are trading across borders, remember to check that your invoice template contains the correct IBAN* and SWIFT/BIC** numbers. Banks are known to charge steep fees and take a lot of time to adjust data of international wires, so it’s better to avoid any mistakes from slipping into the payment form in the first place.

* IBAN - abbreviation for International Bank Account Number. It consists of a two letter country code followed by up to thirty-two digits. An example of an IBAN number looks like this: DE85 1234 5678 9012 3456 00

** SWIFT/BIC - abbreviation for Business Identifier Code: it is a unique, 8 or 11 character code assigned to a financial institution for the purpose of executing payments in the SWIFT network. An example of a BIC number looks like this: CSFBBBFF.

A unique invoice number is a must

Nothing screams ‘blatant negligence’ to tax inspectors louder than the lack of unique serial numbers on your invoices. By law, every invoice ever created has to have a unique serial number, and once the invoice is finalized, businesses are legally prohibited from going back and tampering with this number.

Please note that in situations where you need to cancel or adjust the invoice, we strongly recommend that you do so by creating a credit note and using it to adjust your aggregate sales amounts. This credit note will automatically take the next invoice number in line and will also appear in your exported invoices.

Add a date and payment term

Accountants live and die by dates: every single bookkeeping entry, tax report and financial statement they produce requires a precise date. The invoice issue date also indicates the moment from when the terms of payment take effect.

Skipping the date on the invoice therefore risks creating confusion about how much VAT you have to pay at the end of the month and an outraged accountant might banish your invoice right to the end of a payment queue.

When adding a date, it is also important to indicate within what time period you expect an invoice to be paid. Standard payment terms are 30 days, but these can vary depending on your industry and on what you have agreed with your customer.

What you sell must be counted

The last thing you want is for customers to puzzle over the content of your invoice. Clearly named, line by line enumeration of goods shipped or services provided makes it easy to understand what you are charging for and helps a customer quickly verify that all items were delivered.

It is also strongly advised to include a unit price, the number of units shipped, the applicable VAT percentage and VAT amounts and a total line amount next to each individual item on your invoice. This will ensure that no accidental errors slip into your invoice and that any misunderstandings can be cleared up quickly.

Secure your VAT refund

If you happen to be a registered VAT (value-added tax) payer, you should – in addition to all the details listed above – also supply your own and your customer’s VAT details. Tax authorities might want to check your invoices to verify the validity of your VAT returns, so make sure you have correct VAT IDs included.

Occasionally, countries mandate different VAT rates for different goods/services, therefore it is important to indicate the applicable VAT rate and resulting amount next to each line item included in the document.

When trading across borders, it is important to include the correct VAT amount on the invoice. In many cases this will be 0%, other times you would need to consult accountants in your customer’s country to determine a correct amount.

Brand yourself

To prevent your invoice from sinking into the netherworld of generic looking documents, you can add custom details likely to catch your customer’s eye. Things like logo, personal note or business motto make for strong branding elements and can all be easily incorporated into your invoice.

If you’re dealing with physical goods being shipped, you may also want to include order shipping details, such as a tracking code, making it easy for your customers to follow the delivery of a package.

Quick facts

Debitoor comes with a built-in invoice template which you can use. It takes the information you’ve entered under your settings and while creating your invoices ensures that you get all the information you need in the right places on the invoice.

The invoice template feature also comes with a built-in VAT calculator, so you only need to choose the correct VAT percentage from a drop-down menu or indicate the country of your customer. The Debitoor application will then automatically calculate and apply the appropriate VAT rates and amounts to the invoice.