What an invoice should contain
Requirements differ depending on whether you are VAT registered, so check GOV.UK for your situation. As a sensible minimum, include:
- The word Invoice, a unique invoice number and the invoice date
- Your name or business name and your contact details
- The customer's name and address
- The date the work was done
- A clear description of the work and materials, with prices
- The total amount due, and VAT shown separately if you are VAT registered, along with your VAT number
- How and when to pay, with your bank details or payment link
- Your payment terms, such as payment within 14 days
A simple invoice template
Adapt it to your own business:
INVOICE
[Business name] [Address] [Phone] [Email]
Invoice no: [001] Date: [date]
To: [Customer name], [Address]
Description Amount
[Work carried out on date] £[ ]
[Materials: itemise if you can] £[ ]
Total due: £[ ]
[VAT: £[ ] if registered. VAT no: [ ]]
Payment: bank transfer to [account name, sort code, account number]
Please pay within [14] days. Reference: [invoice no]Good habits
- Number invoices in order, and keep a copy of every one
- Send the invoice on the day the job is finished, while the customer is happy
- Make paying easy: bank transfer, card link or both
- Keep invoices and receipts for the period your tax rules require
- Do not mix personal and business money, a separate account saves hours at tax time
Quote, invoice and receipt: what is the difference?
| Document | What it is for |
|---|---|
| Quote | Says what you will do and for how much, before the work |
| Invoice | Asks the customer to pay, after the work or at an agreed stage |
| Receipt | Confirms the payment has been received |
Payment methods compared
| Method | Good | Watch for |
|---|---|---|
| Bank transfer | Free or cheap, traceable, easy to record | Customer has to enter details, so give them clearly |
| Card payment link | Fast and convenient | Fees, so allow for them in your price |
| Cash | Quick for small jobs | No automatic record. Always give a receipt and record it as income |
| Cheque | Rare now | Takes time to clear and can bounce |
If you are VAT registered
A VAT invoice has additional required details, such as your VAT number, the VAT rate and amount, and a description of the goods or services. The rules are set by HMRC and change from time to time, so follow the current guidance on GOV.UK, or use accounting software that builds compliant invoices.
Friendly reminder wording
- Hi [name], just a friendly reminder that invoice [no] for £[amount] was due on [date]. I've attached it again. Thanks very much, [your name]
- Hi [name], I haven't received payment for invoice [no], which was due on [date]. Could you let me know when I can expect it? [Payment details]. Thanks, [your name]
- Hi [name], I'm following up on invoice [no] for £[amount], now [x] days overdue. Please pay by [date], or contact me to discuss. [Your name]
Chasing late payment politely
Most late payment is forgetfulness, not refusal. A friendly reminder usually works. If it does not, move up step by step.
- A day or two after the due date: a short friendly message with the invoice attached again
- A week later: a firmer reminder stating the amount, the due date and how to pay
- Later: a formal letter, keeping records of every contact
- Business customers may owe interest and fixed compensation under late payment law. Check GOV.UK for the current rules
- For larger sums, consider advice from a solicitor or a debt recovery service
Tax and records
Your invoices are the backbone of your tax return. Sole traders usually need to keep records of income and expenses and report them to HMRC. The detail depends on your circumstances, so check GOV.UK or speak to an accountant.
Common questions
Do I need accounting software?
No. A spreadsheet and a template are enough to start. Software can save time as you grow.
Can I invoice before the job is finished?
Yes, for agreed stage payments, if your quote says so. Say clearly what each stage covers.
What if the customer disputes the invoice?
Stay calm, ask what they are unhappy about, and refer back to your written quote. Keep notes and try to resolve it by talking first.
Is this tax advice?
No. It is general information. Check GOV.UK or ask an accountant about your own situation.
When should I send an invoice?
As soon as the job is finished or the agreed stage is complete, while it is fresh.
What payment terms should I use?
Many tradespeople ask for payment on completion or within 7 to 14 days. Whatever you choose, put it on the quote and the invoice.
Do I need to charge VAT?
Only if you are VAT registered, which depends on your turnover and choices. Check GOV.UK.
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