What Every Invoice Must Include
A professional invoice must contain: (1) Your name, business name, and address. (2) Client name and address. (3) A unique invoice number for tracking. (4) Invoice date and payment due date. (5) Itemised list of services or products with quantities and unit prices. (6) Subtotal, any applicable tax (VAT/GST), and the total amount due. (7) Payment terms and accepted methods. Missing any of these can delay payment or cause legal complications.
Payment Terms That Get You Paid Faster
The most common payment terms are Net 30 (due within 30 days) and Net 14. Shorter terms like Net 7 or "Due on Receipt" are appropriate for smaller amounts or new clients. Including an early payment discount (e.g., 2% off if paid within 7 days) can speed up payment significantly. Late payment fees (1%–2% per month after the due date) are also standard in most jurisdictions and should be stated clearly on the invoice.
VAT and Sales Tax on Invoices
If you are VAT-registered (UK/EU threshold ~€85,000) or GST-registered (Australia AUD 75,000 threshold), your invoice must include your VAT/GST number, the taxable amount, the tax rate, and the tax amount separately. In South Africa, VAT-registered businesses must charge 15% VAT on taxable supplies and include the VAT registration number on every invoice.
Key Takeaways
- Don't rely on gut feeling — use numbers and a clear formula
- Review and adjust your figures at least once per year as costs and market rates change
- Use our free calculator above to apply these concepts to your specific situation
- Compare your results against industry benchmarks and adjust accordingly