Singapore
  • Hong Kong
  • UK
  1. Osome Blog Singapore
  2. The Only Guide You Need To Create Your First Invoice

The Only Guide You Need To Create Your First Invoice

The Only Guide You Need To Create Your First Invoice

Just registered your business in Singapore? Congratulations! It’s time to move on to the next step - the billing. If you are confused about how to create an invoice to bill your clients, fret not. Simple invoices can help save time with all basic accounting details you require to bill clients for your work. Think of them as organised documents that are easy to understand and create.

Here's the good news - the process is pretty simple, and once you get the hang of it, you can streamline the task with a base template. This is what you need to know about creating an invoice.

What Is an Invoice?

An invoice, sometimes also known as a bill or sales invoice, is a document sent out by a business as proof of a transaction, and to ask for payment for a service or product provided.

What Do I Need To Include in an Invoice?

Being fairly remunerated for your work is important, but getting paid on time is also crucial to avoid cash flow problems. A well-designed invoice makes all the difference in making sure you get paid in a timely manner without complication from unclear information.

Here’s what you should include to make your invoice look professional with all the essential information, so your clients can make payment easily.

  1. Company name

The first step in creating an invoice would be to include your company name, the most important element in your invoice. It reflects who you are and validates your brand. For an extra touch, you can even create a company logo using simple design tools such as Canva.

  1. Contact information

Remember to include your name, phone number, email address and address. This information allows your clients to contact you should there be any clarifications regarding the invoice, and it also gives them the opportunity to get in touch with you for future work.

Do the same for your client in a ‘Bill To:’ section, with your client’s contact information, detailing their billing contact name, phone number, email address and address.

  1. Invoice date

Cultivate the habit of including the invoice date for every invoice you create. This will make filing invoices a lot more fuss free, for you and your clients.

  1. Invoice number

Establish a simple invoice numbering system in which you assign every invoice a unique invoice number. You’ll thank us for it later -- this will help you stay organised and track your invoices for bookkeeping purposes a lot easier, especially when it comes to tax season. It will also be a lot more straightforward when you have to discuss a particular invoice with a client.

Don’t crack your brains over the invoice numbering, it can be as easy as numbering them sequentially. For instance, the first invoice you send can be #01, with the subsequent one being #02 and so on.

  1. Outline the provided services or goods

If you are a service provider, list the services rendered to your client so it is easier for the both of you to keep track. Start by inserting a basic table with four columns, detailing the following:

  • A brief description of the service provided
  • The number of man hours or the work quantity
  • The remuneration
  • The subtotal for each service

If you have provided more than one service, feel free to add additional rows in the table.

Elizabeth manages digital media agency OUTRAGED, and provides graphic design services for her client. At the end of the month, Elizabeth creates her invoices, detailing the services provided:

Service Provided Number of man hours Remuneration (per hour) Subtotal
Graphic design for website 10 $50 $500

If you are selling products, the description of goods forms the most crucial part of the invoice. Similar to invoicing for your service, it is important to split your invoice into at least four separate columns: quantity, description, unit price, as well as line total.

Stephanie sells her own handmade accessories online. Whenever she gets an order, she will create an invoice to detail the following:

Quantity Description Unit Price Line Total
3 Emma Bracelet $20 $60
  1. Payment terms

Small businesses typically adopt these three main types of payment terms, in line with common industry practices. It is also dependent on your cash flow needs, and your relationship with the client. Some of the common invoice payment terms include:

  • Net (N)

Net 10’ would imply that the full payment amount is due within 10 days, while ‘Net 30’ would mean 30 days after the invoice date. ‘Net’ can also be abbreviated to ‘N’, so N10 or N30 would appear on the invoice.

  • Payment in advance (PIA)

When working with new clients or clients with late payment history, payment in advance (PIA) could be a good method to deal with them. Under this payment term, your client will have to make the payment in full before they receive your goods or services.

  • End of Month (EOM)

This means that the full amount of payment has to be made within the amount of days stated after the invoice issuance month-end. In your invoice, this can be written as, ‘Payment due 30 days month-end’ or abbreviated to ‘Net EOM 30’. For instance, if your invoice was dated 7 March and your payment terms were ‘Payment due 30 days month-end’, then you should be expecting  the full payment by 30 April.

  • Month following invoice (MFI)

If you are expecting the full amount to be made on the first 15th of the month upon invoice issuance, your payment term can be abbreviated to ‘15 MFI’. For instance, if your invoice date was 7 February with the payment term 15 MFI, the payment would be due on 15 February. However, if the same invoice was dated 16 February, then the payment would only be due on the 15th of the following month, which is 15 March.

Some companies may make payment later than the due date stated, so you should factor these in and take measures to bridge your cash flow gap.

On each invoice, briefly explain your payment terms and late fee policy if you intend to bill clients for late payment. Detail your accepted payment methods, which could be made with a combination of the following:

  • Cash
  • Credit card
  • Cheques
  • Online payments
  • Bank transfer
  • Mobile payments
  • Recurring payments
  1. Discounts

If your relationship with your client is a long-standing one, you may want to offer a goodwill discount. This discount should be included within the invoice, and can be an actual amount or a percentage.

  1. Goods and Services Tax (GST)

Is your business growing?

From CPF, to GST to Skills Development Levy, here's what you need to know to stay compliant.

If your company is registered for GST, you will have to issue a tax invoice or customer accounting tax invoices for your standard-rated supplies. If the total payable amount (including GST) does not surpass $1,000, you may send out a simplified tax invoice. Make sure that your GST Registration Number is reflected on all your tax invoices, simplified tax invoices and receipts.

  1. Amount due and due date

Clearly state the total amount due (including any applicable taxes) at the bottom of your invoice, with the payment due date. For easy readability, you may want to use a different font colour or a bold font. To avoid confusing your client, jot down the payment deadline as a specific date e.g. “Payment due November 14, 2020”.

Including the due date on your invoice serves as a professional and tactful manner of informing your client when they should pay. In addition, you can also set up payment reminders to ensure your clients make timely payments.

What Tools Can I Use To Create an Invoice?

When it comes to generating an invoice, you have so many options to choose from.  From services to invoicing software programs, you can take your pick.

Alternatively, simple tools like Google Docs or Microsoft Word can do the trick. with a variety of professional-looking templates available for your usage so you don't have to start from scratch to create your own.

Automate Your Invoices and Be On Top of your Financial Data

Keeping up with the status of your payments can be draining and distract you from the core business of your company. Put your time to better use and focus on building your business - just leave the bookkeeping and accounting to us at Osome.

Share this post:

Tips to run your business smarter.
Delivered to you monthly.

You'll receive a verification email you'll have to open and confirm the subscription.

You might like it

Should You Consider Using Cryptocurrency in Your Business Operations?
Running My Business

Should You Consider Using Cryptocurrency in Your Business Operations?

There are more than 4,000 cryptocurrencies that exist. Before you jump on the bandwagon, assess whether cryptocurrencies are suitable to be used in your business.

7 Ways To Accept Payments For Your Online Store
E-commerce

7 Ways To Accept Payments For Your Online Store

Many payment options allow you to accept credit cards and other payment types. How do you choose which method to include on your website?

Customer Retention: How To Keep Customers Coming Back Repeatedly
E-commerce

Customer Retention: How To Keep Customers Coming Back Repeatedly

Every business likes new customers, especially when the customer uses their services again and again. Existing customers help in creating a solid foundation of your business that provides a steady revenue stream that costs less than acquiring new customers.

5 Tips for a Streamlined Payroll Process for SMEs
Payroll

5 Tips for a Streamlined Payroll Process for SMEs

For a business to run smoothly, the payroll process must be streamlined and error-free. It is easy to streamline and optimize your payroll and other back-office processes within your SMB. Did you know that this can improve your cash flow?

Phase 2 Heightened Alert Support Package for SMEs (July to August 2021)
Government Grant

Phase 2 Heightened Alert Support Package for SMEs (July to August 2021)

From 22 July 2021, Singapore has reverted to Phase 2 (Heightened Alert). Fortunately, the Singapore Government will be cushioning the impacts of the harsher COVID-19 restrictions with a $1.1 billion support package.

How To Offer Free Shipping Profitably
E-commerce

How To Offer Free Shipping Profitably

Should a customer or seller bear the shipping cost? Let’s explore how a profit margin can still be maintained while offering free shipping.

What Is a Register of Controllers and Why Singapore Companies Now Have To Submit This Document
Secretary

What Is a Register of Controllers and Why Singapore Companies Now Have To Submit This Document

In April 2020, Singapore businesses will have to submit the Register for Registrable Controllers to ACRA. Before, your company was only obliged to maintain it internally. Now you will have to file the Register with ACRA electronically and maintain it updated at all times.

SG Govt Will Extend Loans for SMEs by 6 Months as Part of Heightened Alert Support Measures
Government Grant

SG Govt Will Extend Loans for SMEs by 6 Months as Part of Heightened Alert Support Measures

Singapore's Phase 2 and 3 periods of heightened alert have undoubtedly affected many businesses, especially Small- and Medium-sized Enterprises (SMEs). As such, Finance Minister Lawrence Wong has announced additional support measures for these Singapore-registered companies on 5 Jul 2021.

Clickshare Media Ventures Scales Up E-commerce Operations With Osome as Accounting Partner
Customer Stories

Clickshare Media Ventures Scales Up E-commerce Operations With Osome as Accounting Partner

Clickshare Media Ventures (CSMV) is one of the fastest-growing e-commerce companies in Southeast Asia. In just 3 years, CSMV has built itself to be an 8-figure business with more than 10 direct-to-consumer e-commerce brands in the baby, beauty, and personal care industries.

The 10 Best E-Commerce Payment Gateway for Online Sellers
E-commerce

The 10 Best E-Commerce Payment Gateway for Online Sellers

Other than branding and marketing, these technologically savvy consumers are well acquainted with the Internet and convenient payment gateways and demand nothing less than a seamless e-commerce transaction.

SMEs Can Apply for Relief Measures and Delay Full Loan Repayments till 30 Sep
Government Grant

SMEs Can Apply for Relief Measures and Delay Full Loan Repayments till 30 Sep

As the pandemic gradually transitions to an endemic, the Monetary Authority of Singapore (MAS) has announced the 'final extension' of relief measures for small and medium-sized enterprises (SMEs) affected by the COVID-19 situation to resume full loan repayments.

8 Tips to Improve Your E-commerce Photos
E-commerce

8 Tips to Improve Your E-commerce Photos

Want to kickstart your start-up or bolster an existing online business? These 8 e-commerce photography tips could have a direct impact on small businesses owners in Singapore, take a look.

Tips to run your business smarter. Delivered to you monthly.

You'll receive a verification email you'll have to open and confirm the subscription.

We’re using cookies! What does it mean?