How to create an invoice in 6 easy steps

If you’re wondering how to create an invoice or why they’re important documents in the first place, there’s lots to know. For businesses like yours, invoices are a critical part of keeping track of your sales, revenue, purchases, and expenses.

To get you started, we’ll review what an invoice is, how to invoice an employer, and how to track your hours accurately. And because running a small business can be tough, we’ll even provide you with a free invoice template.

Let’s get to work. 






What’s an invoice?
An invoice is a document that lists any goods or services that have been provided, along with the prices and terms of payment that go with them.

You can think of it as a written record that provides an overview of what was requested, what was delivered, and how much it all costs. 
An invoice usually includes: the names and addresses of both parties, the date of the transaction or services provided, and a description of what was delivered. It’s also typical for an invoice to include payment terms, like the due date, any discounts, and how to make a payment. 
Do your team members need to invoice you?
Do you have shift workers? Are you a subcontractor? Then you might need to think about invoices. Here’s how to tell.

Depending on the work you’ve hired out for or are completing, and the type of employees you’re considered to be, an invoice might be required. This could be the case if you’re an independent contractor, freelancer, self employed, or if you employ other people.

Here’s an example: a restaurant might employ a graphic designer on a freelance basis to help design menus, posters, and social media posts. But even if the designer is referred to as a team member and works 20 hours a week, if they’re not on the payroll, they’ll need to submit an invoice.

This invoice would outline the projects they’ve worked on, how long it took to complete them, and how much they cost. That breakdown could be shown as hourly rate, the total amount due, plus any applicable taxes. 
In this scenario, the business owner would need to track, store, and pay this invoice. It needs to be part of their records so they’re staying on budget and managing labor costs. If you’re using Homebase to keep you on track, you can store and review invoices for up to a year.
If you’re not a freelancer or self-employed, certain businesses still might require shift workers to submit documentation of when they worked. This isn’t necessarily an invoice, but it is similar. A timesheet documents hours worked to calculate their pay. 
How to create an invoice that gets you paid
If you’re looking for how to create an invoice that actually gets paid, we’ve got a step-by-step process that can be made easier with time tracking tools and an invoice template.  
Names and date
When creating an invoice, you’ll need to add in the names of who’s worked, who’s paying the bill, and who’s getting paid. Make sure to include any company names and addresses, as well as the date the invoice is submitted. Depending on how detailed you or the client/customer want it to be, you may also want to include the dates that services were performed. 
Include an invoice number
Every invoice needs a unique number. This is for tracking purposes for you and your customers. For example, if 30 days go by and you realize you haven’t been paid, you can reach out to your customer with the exact invoice number as reference. There’s no right or wrong way to number an invoice, but it can be helpful to use a sequential order, and in some cases have something to designate the client worked on.
Outline the work or services that were provided
Describe the work or services provided, or the products sold. It’s good practice to include a brief description and pricing that goes along with it. Try to be specific. For instance, instead of labeling a project “Design work”, add in any details that can identify the work completed, like: Graphic design for menu updates and summer promotions.

You’ll also want to include any relevant information, like purchase order numbers or reference numbers.  
Calculate the total hours of work/services provided 
Once you have all of the work or services outlined, tally it up. You’ll want to include a pre-and-post tax amount, and include any extra fees or discounts provided.

Make sure your invoice is easy to read and doesn’t confuse the person or company who’s paying. Ensure all totals are clearly laid out so someone can look at a glance and know exactly how much is owed. This is especially important if you’ve completed multiple projects or provided a variety of services. Keep everything documented, but be clear and concise.
Include your payment terms and instructions
Clearly indicate when payment is due and how to pay. This could be instructions for an e-transfer, or how to pay by credit card, check, or a other online method. If you have global clients, make sure you provide the right account details, since some accounts can’t accept international funds. 
Be clear with your payment terms. Most contractors ask for net 30 or net 45 , meaning payment is expected within 30 or 45 days. You can make your payment terms whatever you want, but consider that for certain businesses it can be tricky to get payment over quickly. Small businesses may not have cash flow available right away, and larger companies might be decked out in red tape where it takes a few weeks to get anything processed. And of course, just because you say net 30 payment terms? Well, it doesn’t mean your clients will actually adhere to them.
Review and send
One of the most important parts of creating an invoice is making sure that it’s actually correct. Before you hit send, review your invoice carefully. Doublecheck that everything is in order and your paycheck won’t be delayed because you have to redo something.

Are the date and names on your invoice correct? Is every project outlined and detailed with the right information, including time worked? Are your payment terms outlined and easy to understand?

When you’ve confirmed that everything is indeed correct, send it to the payee! This could be via email, snail mail, an online portal. 
How to accurately track your hours
One of the first steps to creating an invoice happens before you’re actually ready to get paid: accurately tracking your hours. This is where time clocking comes in handy.

Did we lose you? We promise—this doesn’t have to be a tedious task.

Timesheets and time clocking are a critical part of keeping your invoice up-to-date and accurate. When everything is correct, you reduce the risk of the payee asking questions and slowing down the payment process.

To keep hours tracked as you go, consider timesheet templates or time clock app . Are you an employer who receives invoices from your clients? Ask them to use a timesheet or time tracking app if you pay hourly. It’s a great way to ensure everything is accurate and leaves less room for error.
Timesheets
We’ll start with timesheets. This is a record of clock ins and clock outs . While you might think that timesheets are only used for hourly employees, it can also be helpful in tracking the time you’ve put into a project so you can properly calculate your pay at the end of a period. This can especially help you determine project rates based on number of hours worked.

Different types of teams and workers use daily timesheets, project timesheet templates , or time trackers for projects and tasks. These types of time tracking tools are useful for determining how much time was spent on a specific area of work.
Time clocks
Now let’s talk about time clocks. An online time clock is a modern, digital way for employees to clock in and out of their shifts or track the time they’ve put into a project. Some types of software, like Homebase , connect with online timesheets or time clocks to calculate hours and create payroll reports .

Tools like timesheets and time clocks don’t just make your invoicing easier, they also can help ensure you’re getting paid the right amount. Without them, you might be billing clients for estimates of time worked rather than the actual time you’ve put in. It also helps with transparency, so you can be clear and communicative about the time spent on a project. 
How to boost invoice accuracy with your free timesheet template
Ready to make invoicing the best part of your workday? Boost your invoice accuracy with free invoice templates, like this timesheet template .

Timesheet templates give you the foundational systems you need to keep work on track. Templates mean that you don’t need to create your own tracking documents from scratch and can dedicate your time to what matters most: doing your work and getting paid for it, too. 

Homebase gives you the tools to track time daily, weekly, and monthly. With our free timesheet tool , you can keep all of your labor data in one place so you can track your work hours in real time, without the spreadsheets and unreliable pen-and-paper tracking systems.

These tools also help with invoice accuracy by highlighting any time-clock errors, and best of all, makes it easy to fix them. This lets you keep accurate records and stay compliant with any labor laws that may impact your business. 
If you’re new to invoicing, timesheet tools are the perfect place to get your feet wet. We know—learning something new, especially when that’s software or accounting related, can seem like a daunting task. However, timesheet templates go a long way to make things easier, more efficient, and more effective.
How to create an invoice FAQs
What’s an invoice?
An invoice is a detailed document that outlines any goods or services that have been provided, plus the prices and terms of payment that go with them. It’s a written record that provides an overview of what was requested, what was delivered, and how much it all costs. 
Invoices include names and addresses, the date of the transaction or services provided, and a description of what was delivered. Plus, they also include payment terms, like due date, discounts, and clear instructions on how to pay.
Who needs to send invoices?
Are you a small business owner or a worker who’s not on payroll but provides goods or services? Yyou may need to send invoices to customers or clients. These types of roles include freelancers, independent contractors, and service providers like landscapers, for example.

Suppliers who provide goods to businesses might also need to send invoices that outline their products and pricing in order to receive payment. 
How can you accurately track your hours for invoicing?
To accurately track hours for invoicing, use tools like timesheets and time clocks. They make sure that everything is correct. They can reduce the risk of the payee asking questions about time worked and slowing down the payment process.

These tools help make sure that you’re charging the right amount and getting paid the right amount. Without them, you might be billing clients for estimates of time worked rather than the actual time you’ve put in.

Sure, using a timesheet or time clock to support your invoicing makes your job easier. But it can also help you build trust, establish good morale , and better your relationship. By being able to clearly communicate the amount of time you’ve put into a project, you’re proving more than just hours worked, but also that you’re transparent and organized. 
What does a timesheet template include?
A timesheet template is a predefined page layout that lets you record working hours, but also your breaks and time off. It includes your name, date, number of hours worked, the price per hour or project, task you’ve completed, and any clock in-and-out times, like breaks or time off. 
Are time tracking tools that accurate? 
Yes! Time tracking tools are very accurate, especially the automatic kind . Some time tracking apps, like Homebase,, come with free monthly timesheet templates that also act as a time card calculator . This means it automatically calculates your hours worked, so you can get paid accurately.

Worried about mistakes? Automatic time tracking tools can give you the heads up about any timesheet errors. Plus, they’re all stored online and in the cloud, so you don’t have to worry about literally losing hours.
How do time tracking tools support the invoicing process? 
Doing any task manually leaves lots of room for error, especially with tasks that involve lots of calculations. For example, when someone’s calculating the time they’ve spent on a project and they haven’t used any time tracking tools, there’s a high chance they’ll make a typo, add a zero that shouldn’t be there, or simply just estimate how much time it took them to work.  This can cost the worker and the business money. 
Get time tracking tools to support the invoicing process. That way everyone knows exactly how many hours were worked and how much they should get paid.
Is your business struggling with invoicing?  Get Homebase for easy scheduling, time clocks, payroll, messaging, HR, compliance, and more—all in one app. Get started for free .
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