How to make an invoice: a step-by-step guide

What an invoice is

An invoice is a request for payment. It tells your customer what they bought, how much they owe, and when and how to pay. It is also a record: you need it for your accounts, and your customer needs it for theirs.

A good invoice is one your customer can pay without writing back to ask a question. Every step below is there to remove one of those questions.

Step 1: Add your business details

Start with who is billing. Put your business name, address, email and phone number at the top. If you trade under your own name, use your full name. If you run a limited company, use the full registered company name.

If you are registered for a sales tax, add your registration number here: your VAT number in the UK, or your GSTIN in India.

Step 2: Add your customer's details

Next, who is paying. Add your customer's name or business name and their billing address. Add a contact email so the invoice reaches the person who approves payments, not only the person you worked with.

If your customer is GST registered in India, include their GSTIN. If they gave you a purchase order (PO) number, add that too, because many finance teams cannot pay an invoice without one.

Step 3: Give it a unique invoice number

Every invoice needs a number that you never reuse. It is how you and your customer refer to the invoice when a payment arrives. Most people use a simple sequence such as INV-0001, INV-0002, and so on.

In India, GST invoice numbers must be consecutive, no longer than 16 characters, and unique for the financial year. The UK expects a unique sequential number on VAT invoices too.

Step 4: Set the dates and payment terms

Add the date you issue the invoice and the date payment is due. Payment terms explain the gap between the two. "Net 30" means payment is due 30 days after the invoice date.

Writing the actual due date, not only the term, avoids confusion. If you agreed terms in a contract, match them exactly.

Step 5: List the work, line by line

Add one line for each product or service. Each line needs a clear description, a quantity and a rate. The amount for the line is the quantity multiplied by the rate.

Be specific. "Website design, homepage and 3 inner pages" is easier to approve than "Design work". If you bill by the hour, put the hours in the quantity.

Step 6: Add tax and discounts

Show any tax separately from the subtotal, with the rate and the amount. Do the same for discounts. Your customer should be able to check the total with a calculator.

Only charge a tax you are registered to collect. If you are not registered, do not add a tax line.

Step 7: Add payment details and send it

Tell your customer how to pay: bank details, a payment link, or the methods you accept. Add a short thank-you note if you like.

Save the invoice as a PDF so the layout cannot change, then email it. Keep a copy for your records.

If you invoice in the United States

There is no single federal format for a US invoice. Sales tax is set by each state, and many states do not tax most services, so check the rules for the state where the sale takes place.

If you are a freelancer, a US business client will usually ask you for Form W-9. For payments made from 2026, they report what they paid you on Form 1099-NEC once the total for the year reaches $2,000 (it was $600 before). You still owe tax on income below that amount.

If you invoice in the United Kingdom

If you are not VAT registered, a simple invoice is fine, but you must not charge VAT. Registration becomes compulsory once your taxable turnover passes £90,000 in a rolling 12-month period.

If you are VAT registered, your invoice must be a VAT invoice. That means extra fields such as your VAT number, the tax point, and the VAT rate and amount. Our guide to what to include on an invoice lists them all.

If you invoice in India

If you are GST registered, you issue a tax invoice with your GSTIN, an HSN code for goods or an SAC code for services, the place of supply, and the tax split correctly. Within a state, that means CGST and SGST. Between states, it means IGST.

For services, a GST invoice should be issued within 30 days of the supply. If you are under the composition scheme, or your supply is exempt, you issue a bill of supply instead of a tax invoice.

Common mistakes to avoid

Most late payments start with an invoice that is missing something. Check for these before you send.

• Reusing or skipping invoice numbers.
• No due date, or a due date that does not match the agreed terms.
• Vague descriptions the customer cannot match to the work.
• Charging tax you are not registered to collect.
• Missing payment details, so the customer has to ask how to pay.
• Sending an editable document instead of a PDF.

A note on the rules

This guide is general information, not legal or tax advice. Rules change, so check the official guidance for your country or ask an accountant before you rely on it.