What Is an Invoice?

An invoice is a formal, itemized document you issue to request payment for goods or services, showing quantities, unit prices, taxes, and a unique invoice number and date for tracking. It states payment terms, due date, accepted methods, and bank or payment details so you can reconcile receivables and enforce late fees.

What an Invoice Is: Quick Definition

An invoice is a formal, itemized document a seller issues to a buyer that lists the goods or services provided, quantities and unit prices, a unique invoice number and date, payment terms and due date, and line-item subtotals, taxes, shipping, discounts, and the grand total in a specified currency.

10 Essential Invoice Parts

Include a clear, unique invoice number and date and list both seller and buyer names with full contact details so you can track and verify each transaction for accounting and tax purposes. Provide an itemized description with quantities, unit prices, SKUs or service codes, and line totals. Present subtotal, taxes, shipping, discounts, and grand total in the invoice currency. State payment terms, due date, accepted payment methods, bank details, and late-payment penalties.

Common Invoice Types for Freelancers

You'll issue final (sales) invoices after delivery to request payment. Use pro forma invoices to confirm terms or request advance payment. Timesheet or hourly invoices suit billable-hour work. Implement recurring invoicing for subscriptions or retainers to automate periodic charges and stabilize cash flow.

Create and Send an Invoice That Gets Paid

Start by assembling a clean, traceable invoice: label it "Invoice," list your business and client details, assign a unique invoice number and issue date, and itemize goods or services with quantities, unit prices, taxes, and totals. State precise payment terms, the exact due date, accepted payment methods, and bank details. Include early-payment discounts and specify late-payment penalties.

Track Invoices and Resolve Nonpayment

Record every invoice in your accounting system with its unique number, issue and due dates, customer ID, amount, and payment status. Automate reminders (7 days before due, on due date, 7 and 30 days past due). For disputes, document complaints and attach delivery proof. If nonpayment persists beyond 60-90 days, apply late fees, negotiate plans, or escalate to collections.