How to invoice for small businesses

Getting paid on time is what keeps your business running, and a clear, professional invoice is the best way to make that happen. A well-structured small business invoicing process helps you avoid late payments by including all the key details your client needs, such as your business information, a breakdown of charges, payment terms, and due dates. That way, there’s no confusion about how much is owed or when payment is due.

Nevertheless, invoicing doesn’t have to be boring! With invoicing software, you can customize your invoices by adding your logo, brand colors, and even a personal thank-you message to connect with your clients on a human level.

In this guide, we’ll walk you through everything you need to know about creating invoices for small businesses that get you paid faster. Let’s start with the essential details every invoice should have.

Check out our guide if you’re just starting your small business.

Essential components of a small business invoice

A well-structured small business invoicing system helps you avoid payment misunderstandings with clients, speed up payments, and reinforce your brand’s credibility. Here’s what every invoice should include:

1. Your business information

• Business name
• Phone number or email
• Business logo.

2. Client information

• Client’s name or business name
• Contact details (email address, phone number, or mailing address)
• Double-check accuracy to avoid sending invoices to the wrong contact.

3. Invoice number

Every invoice in your small business invoicing system should have a unique number to keep things organized. A simple system could be:

• Sequential numbers (INV-001, INV-002, etc.)
• Date-based format (2024-001, 2024-002)
• A combination of both (INV-2024-001)

4. Itemized charges

• Clear description of each product or service
• Hours worked
• Rate per hour
• Total cost for the service provided.

5. Payment terms and methods

• Due date (e.g., “Payment required within 15 days”)
• Accepted payment methods (bank transfer, credit card, PayPal, etc.)
• Late payment policy (e.g., 5% late fee if unpaid after 7 days)

By including these key elements, you’ll create invoices for small businesses that look professional and ensure you get paid on time.

How to create an invoice for small businesses

Think of your invoice as a reflection of your small business. A well-structured small business invoicing process sets the tone for your client relationships, showing that you’re professional, organized, and easy to work with. Here are the best practices for creating invoices for your small business:

Gather essential business details

Start by including the basics: your business name, address, contact information, and logo. This makes your invoice look professional and ensures clients can easily reach you if needed.

Save time with Bookipi’s free invoicing templates.

Clearly list services or products

Invoices for small businesses should be easy to understand so clients can see exactly what they’re paying for. Be clear and specific by including:

• A clear description of the service or product
• Quantity or hours worked
• Rate per unit or hour
• Total price for the service or product

Set payment terms and due dates

To keep your invoice system for small businesses running smoothly and encourage clients to pay on time, be sure to include:

• The due date (e.g., “Payment is due within 15 days”)
• Accepted payment methods (bank transfer, credit card, PayPal, etc.)
• Late payment fees (e.g., a 5% charge if unpaid after 7 days)

Calculate taxes and additional costs

Avoid confusion by listing the subtotal and adding any necessary costs, such as sales tax, VAT, or additional fees. This ensures your small business invoicing process stays legally compliant with tax authorities like the Australian Taxation Office (ATO) while keeping things transparent for your clients.

Provide a unique invoice number

Assigning a unique invoice number helps keep your invoice system for small businesses organized. This allows you to easily track payments and reference past invoices when needed. Common formats include:

• Sequential numbering (INV-001, INV-002, etc.)
• Date-based numbering (2024-001, 2024-002)
• A combination of both (INV-2024-001)

Use an invoicing app

To save time and reduce errors, consider using Bookipi’s invoicing app to create and send invoices quickly. Bookipi offers:

• Invoice templates for a professional look
• Automated invoice tracking to see when clients view or pay
• Built-in tax calculations to simplify compliance

Alternatively, you can use Bookipi’s free invoice generator to create professional invoices for your small business if you’re not ready to commit to an invoicing app.

Read next: 9 small things you can do to make your business grow.

How do I customize invoices for my small business?

A well-designed small business invoicing process helps you stand out, strengthens client relationships, and even encourages repeat business. So, instead of making your invoices feel like cold transactions, why not leave a lasting impression on your clients? Here’s how to deliver unforgettable experiences with invoices for small businesses:

Add a personalized touch

A little customization can go a long way in building client loyalty. Here are some simple ways to make your invoices feel more personal:

• Say thank you: A short message like “Thank you for your business! We appreciate you.”  is a small gesture that makes your invoice feel warm and professional.
• Offer an exclusive discount: A small discount on a future service can make your clients feel valued and encourage them to return.
• Mention your loyalty program: If you have a loyalty program, include a note like “You’ve earned 50 points toward your next purchase!” to keep clients engaged and encourage future purchases.

Adding these small touches turns invoices for small businesses into relationship-building tools rather than just bills.

Brand your invoices

A branded invoice makes you look more professional and leaves a lasting impression. Here’s how to align your invoices with your brand:

• Add your logo: A logo with your initials, for example, makes your invoice instantly recognizable.
• Use brand colors: Match your invoice colors with your website, marketing materials, or business cards for a consistent look.
• Select a business-friendly font: Stick to easy-to-read fonts like Arial, Calibri, or Open Sans.

By customizing your small business invoicing process, you create a more engaging, trustworthy, and professional experience for your clients.

Additional reading: 7 tips to make your small business stand out. 

Understanding the benefits of using an efficient invoice system for small businesses

An efficient small business invoicing process saves you time, improves cash flow, and helps you manage your finances effortlessly. Let’s break down what makes an invoice system for small businesses efficient and how it can help you get paid faster.

What makes an invoice system efficient?

A great invoice system for small businesses should work for you, not add to your workload. Here’s what to look for:

• Automation: Set up recurring invoices, payment reminders, and automatic calculations to save time.
• Customizable templates: Make your invoices look professional by adding your colors and logo for a consistent business image.
• Integration with accounting software: Sync invoices with tools like QuickBooks or Xero to easily track finances.

Looking for these features ensures you choose an efficient invoice system for your small business that reduces administrative work and manual errors.

Read next: How AI can help small businesses.

How efficient invoicing improves cash flow and management

A streamlined small business invoicing process helps maintain steady revenue by:

• Sending invoices promptly.
• Setting clear payments so clients know when and how to pay you.
• Scheduling automated payment reminders before and after your payment is due to prevent delays.

A well-organized invoice system for small businesses helps you keep track of your expenses and organize your finances by monitoring outstanding payments, maintaining accurate tax records, and generating financial reports that give you a clear view on your income and expenses.

Additional resource: 6 Bookkeeping tips for small business

The power of invoicing anywhere

A mobile invoice system for small businesses makes it easy to send invoices, track payments, and manage your finances from anywhere. Apps like Bookipi allow you to:

• Create and send invoices in minutes right from your phone or tablet.
• Get instant payment notifications when clients view or pay an invoice.
• Reduce errors with automatic tax calculations and auto-filled client details.

Small business invoices FAQs

What’s the difference between an invoice and a quotation (estimate)?

Think of a quotation (estimate) as a price preview you send before starting a job to show your client what to expect in terms of cost. An invoice, on the other hand, is your official request for payment sent after the work is done, with final pricing, due dates, and payment details.

How can I avoid overdue payments from clients?

• Set clear payment terms upfront, especially your due date on invoices.
• Offer multiple payment options like credit cards, PayPal, and bank transfers to make it easier for clients to pay.
• Use small business invoicing softwares to send automated payment reminders, encouraging timely payments.

Read next:  15 invoicing mistakes to avoid with your small business.

What should I do if a client still refuses to pay an invoice?

• Start with a friendly reminder (e.g., a quick message or email) to nudge them.
• If the first reminder is ignored, resend your invoice and clearly state the overdue amount, original due date, and any late fees.
• Consider breaking up the balance into smaller payments, if the client is struggling financially.
• If the client is still avoiding payment, send a written notice warning of legal action.
• As a last resort, you can hire a debt collection agency or pursue legal action to recover unpaid invoices.

Can small business invoices integrate with accounting systems?

Yes! Invoicing tools like Bookipi offer an invoice system for small businesses that integrates with accounting software, allowing you to:

• Sync invoices automatically with your bookkeeping system.
• Keep organized records, reducing stress during tax season.
• Get real-time insights into outstanding invoices and incoming revenue.

Additional reading: 5 ways to take your small business to the next level.