Creating the perfect invoice is one of the factors which will help your company to stand out. Whether you have created thousands of them already or are working on your first invoice: Congratulations.
Your work deserves to be paid. But do you know what it needs to create the perfect invoice? A correct invoice in conformance with the law?
Let’s start with the basics. It seems obvious, but – gosh! – you would not believe the things I have seen. An invoice, just as any professional correspondence for that matter, needs a professional heading. With your (or your firm’s) name, your address and if possible a logo (but please: spare me the fancy WordArt creations in neon colors – you’ll be better off without logo…but I will talk to you about that some other time). Let’s stick to the topic: Your invoice needs to state the following.
- Your address
- Your client’s address
- Date of the invoice
- A unique and continuous invoice number
- Detailed charges, listing each product or service separately
- Your Payment Details, i.e. PayPal, Bank Account, …
- Due date
There you go. But what else do you need to make your invoice legally correct? The answer to this question depends where you work from.
USA
The USA do not have many legal requirements for freelancers’ invoices – but be aware that your client will have to file the yearly payments to you to the IRS who will then contact you to file a form. My advice: Don’t use your SSN on an invoice, you never know where it is going to end and who’s going to see it). Your client might need it once, however, to file his payments correctly.
UK
In the UK, the word ‘invoice’ must clearly be indicated on the document. The following information must also be included:
- a unique identification number
- your (company) name, address and contact information
- company name and address of your client
- detailed charges
- the date the goods or service were provided (supply date)
- date of the invoice
- the amount(s) being charged
- VAT amount (if applicable)
- the total amount owed
Sole traders must include:
- the trader’s name or any business name being used
- an address where any legal documents can be delivered to you if you are using a business name
Switzerland, Austria, Germany
The German speaking countries Switzerland, Austria and Germany have similar requirements – except that there is no legal reason to mention the word ‘invoice’. If the invoicing party is exempt from the VAT (as most freelancers are), they need to explicitly state that they are exempt (e.g. “Kein Ausweis von USt gem. § 19 Abs. 1 UStG” in Germany or “Umsatzsteuerfrei aufgrund der Kleinunternehmerregelung” in Austria).
E-Invoice
The future, or rather the present invoice is electronic. E-Invoices and other forms of electronic billing are replacing invoices on paper. In fact, most of us send their invoice via e-mail, attached as pdf. For a while, those documents required – at least in Europe – a digital signature to make sure they have not been tempered with after the date issued. This process is not legally binding anymore. However, it still is possible to print an invoice, stamp it and keep it in an analogue archive – good and recommended practice for all the sceptics out there.
The Unwritten Rule
There is no law for it – but I cannot stress enough how important an appealing design is. And a friendly word from you to your client accompanied by an appreciative thank you makes invoicing more fun – and the world a better place. If you decide to let me do your invoices, for example, I’ll let you choose from different designs. Of course you can upload your own logo and you’ll have plenty of space to address your client individually and personally.
I hope this blog has been helpful to you and I appreciate your attention!
