What To Include in an Ecommerce Invoice?

What Is An Invoice?

Invoices play a paramount part in your accounting and tax purposes. It is also the main reason why you, as a business owner, should not be careless or haphazard in dealing with invoices, be it for a brick-and-mortar or ecommerce business. An invoice is used to keep track of all items or services you sold and monitor every transaction record accurately.

Well, traditional invoices or receipts are relatively simpler and straightforward because they are issued by a retail store. Customers walk into the store and purchase a service or product, and are given proof of transaction for their purchase. The retail store will be issuing a receipt that is based in a fixed territory.

E-invoices are a bit different, as taxation is always territory-specific. An ecommerce store is operated on the world wide web, which means that your customers can come from a variety of different countries. You may be based in Singapore, but your customers can be living in Japan, Korea or the United States.

In the following points, we will include some important pieces of information that you should include when designing an invoice for your ecommerce business.

What Kind Of Ecommerce Invoice Should You Prepare?

Firstly, look at what type of online business you are running. These can include but are not limited to:

• Business to Business (B2B)
• Business to Consumer (B2C)
• Consumer to Consumer (C2C)
• Consumer to Business (C2B)

When it comes to invoices, you should have firm policies in place that are stated clearly on your ecommerce website or invoice. Some common policies that you can state in your invoice are:

• Is payment required up front?
• Do you offer instalment payment options?
• When is the deadline for payment to be made?
• Are you implementing any late charges?
• What type of payments do you accept?
• What are your refund and return policies?

A refund and return policy are important when it comes to goods. You can choose to include these terms and conditions in your invoice.

• No refunds or exchanges once the item is delivered successfully.
• No refunds or exchanges unless the item is defective.
• Partial refund for defective goods.
• One to one exchange within seven days.
• Strictly no refunds or exchanges.
• Change of mind is not applicable as a reason for refund or exchange.

Firstly, look at what type of online business you are running. These can include but are not limited to:

• Business to Business (B2B)
• Business to Consumer (B2C)
• Consumer to Consumer (C2C)
• Consumer to Business (C2B)

When it comes to invoices, you should have firm policies in place that are stated clearly on your ecommerce website or invoice. Some common policies that you can state in your invoice are:

• Is payment required up front?
• Do you offer instalment payment options?
• When is the deadline for payment to be made?
• Are you implementing any late charges?
• What type of payments do you accept?
• What are your refund and return policies?

A refund and return policy are important when it comes to goods. You can choose to include these terms and conditions in your invoice.

• No refunds or exchanges once the item is delivered successfully.
• No refunds or exchanges unless the item is defective.
• Partial refund for defective goods.
• One to one exchange within seven days.
• Strictly no refunds or exchanges.
• Change of mind is not applicable as a reason for refund or exchange.

Why It’s So Important To Prepare Invoices

What Should You Include In An Ecommerce Invoice?

When designing an ecommerce invoice, you want to be as clear as possible and include all relevant pieces of information. If you are going the minimal route, be sure that your ecommerce invoice still includes a certain minimum level of information.

Here is some information you can consider adding to your invoice based on your business:

1. Include the word “invoice” prominently
2. Unique Invoice Serial Number (invoice number)
3. Your Official Business Name, and Any Secondary Names (Supplier Information)
4. Contact Information
5. Date of Invoice
6. Taxation and Other Business Registration Codes
7. Client Details (Customer Information)
8. Item Description
9. Additions and Deductions to Costs
10. Details and Modes of Payment
11. Sales Tax
12. Total Amount Due
13. Terms and Conditions

In some ways, an ecommerce invoice is similar to a normal invoice. A digital invoice will be in the form of a PDF or Word file that can be sent through electronic means, such as an email. In some less common cases, invoices will come as a scanned image.

Take Note of Tax Rules When Selling Outside Your Country

Selling within your country is somewhat less intimidating, as you are certain and used to the tax rules and what you need in the invoice itself. The question is, what if you are selling internationally? Do the same rules apply when issuing invoices?

When you start an ecommerce business online, you may want to expand out of your country and sell your products and services internationally. Keep in mind that tax authorities are usually more strict on overseas sales, which is also why you should always issue a proper tax invoice with international shipments. In some countries, your business must issue proper invoices, with many ecommerce businesses choosing to add invoices into their shipment packages together with return forms and packing slips.

Here are some tips to take note of before you start selling in a particular country that is out of your home country.

1. What tax rules apply in that country or jurisdiction?
2. Do you need to charge taxes to your customer?
3. Is your invoice design compliant with that country’s tax legislation?
4. What language should your invoices be in?
5. What mandatory information do you have to include when you sell internationally?

Remember that because each country’s legislation and tax rules are different, you may need to customise your invoice design to suit each country to stay compliant. This can be a tedious process if you do not know how and where to get started.

Lim Wan ErBusiness Writer

Always game for a good cup of iced latte and soggy fries, Lim Wan Er indulges in a solo vacation at least once a year for the sole purpose of exploring the local cuisine.

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