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A professional invoice tells the client what they owe, when they need to pay and how to pay you.
An invoice records what you supplied, how much the customer owes and when payment is due.
There is no single required layout for an ordinary UK commercial invoice, but there is information an invoice should contain and VAT invoices have additional legal requirements. GOV.UK lists core invoice information including a unique identification number, supplier and customer details, supply date, invoice date, description, charges and total amount owed.[1]
A good invoice also makes payment straightforward. The fewer questions the client has to ask, the easier it is for their finance team to approve and pay it.
Include your business name, address and contact details.[1]
If you are a sole trader, the invoice must include your name and any business name you use. If you trade under a business name, you must also provide an address where legal documents can be delivered.[1]
If you invoice through a limited company, use the company’s full registered name as it appears on its certificate of incorporation.[1]
You can also include your company number or registered office address if useful, but those are not listed by GOV.UK as general mandatory fields for a limited company invoice.
Include the name and address of the customer you are invoicing.[1]
Where the client is a limited company, use the correct company name rather than simply the name of the person who commissioned the work.
Getting the customer right matters because the invoice should identify the person or business that owes the money.
Give every invoice its own unique identification number.[1]
A simple numbering system such as INV-001, INV-002 and INV-003 is usually easier to manage than creating numbers manually each time.
If you issue VAT invoices, make sure your numbering also complies with the VAT invoice rules that apply to your business.[5]
Include both the date of the invoice and the date the goods or services were supplied.[1]
Do not assume the date printed on the invoice automatically determines when statutory interest begins.
If you agreed a payment date with the client, payment becomes late after that agreed date.
If no payment date was agreed, payment will generally become late 30 days after the customer receives the invoice or you provide the goods or services, whichever is later.[2]
Explain exactly what the invoice relates to.
“Professional services” may leave the client wondering which work you are charging for.
Something like “Website redesign, phase 2, under statement of work dated 12 March” gives the accounts team a much clearer reference point.
Include purchase order numbers or project references where the client requires them.
Show what you are charging and the total amount payable.
Where there are several items or deliverables, break them down so the client can see how the total was calculated.
If VAT applies, make sure the invoice contains the additional VAT information required for the type of VAT invoice you are issuing.[5]
State when payment is due.
For example:
The invoice should reflect the payment terms already agreed with the client rather than introducing different terms after the work has been completed.
Where no payment date has been agreed in a business transaction, payment will generally become late 30 days after the customer receives the invoice or you provide the goods or services, whichever is later.[2]
Make it obvious how the client should pay you.
For bank transfers, this will normally include:
Ask the client to use the invoice number as the payment reference so you can match incoming payments to the correct invoice.
Bank details are practical information rather than a general statutory invoice requirement, but an invoice that does not explain how to pay creates unnecessary friction.
For qualifying business-to-business debts, you may have a statutory right to charge interest if the customer pays late.[3]
The statutory rate is 8 percentage points above the Bank of England base rate.[3]
Fixed debt recovery compensation may also be available. The current fixed amounts are £40, £70 or £100 depending on the size of the debt.[4]
If your contract already sets its own interest rate or other remedy for late payment, the statutory rate may not apply.
You do not have to put a statutory-interest warning on the original invoice to create the statutory right. Adding a clear late-payment statement can still be useful because it tells the client what may happen if payment becomes overdue.
VAT invoices have additional requirements.
Depending on the type of VAT invoice, required information can include:
Different requirements can apply to full, simplified and modified VAT invoices.
If you are VAT registered and make a taxable supply to another VAT-registered business, you will generally need to issue a VAT invoice.[5]
If your contract is with a limited company, invoice that company rather than an individual employee or a related business.
Check the contracting party before sending the invoice.
Do not leave completed work sitting unbilled.
Send the invoice promptly and in line with the billing schedule agreed in the contract.
Make it easy for someone who was not involved in the project to understand what the invoice relates to.
Project names, service dates and purchase order numbers can all help.
If your contract gives the client 30 days to pay, adding “due in 7 days” to the invoice does not necessarily rewrite the contract.
Keep the invoice consistent with the terms already agreed.
If you are required to issue a VAT invoice, use the correct VAT invoice format and include the required information.[5]
A VAT-registered customer will normally need appropriate evidence to support recovery of input VAT, so errors can delay processing.[5]
A professional invoice identifies both parties, explains what was supplied, states how much is owed and gives the client a clear payment deadline.
Add the correct VAT information where applicable and make payment as easy as possible.
Once the details are ready, use Kwibble’s invoice generator to create a consistent invoice and check it carefully before sending.
[1] GOV.UK, Invoices: what they must include
[2] GOV.UK, Payment obligations
[3] GOV.UK, Interest on late commercial payments
[4] GOV.UK, Claim debt recovery costs on late payments
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