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Invoice Template Makes Billing Easier
Posted : 12 December, 2013
If you’re like many small business owners or managers, chances are you are still using a written invoice pad to create and remit customer receipts and bills. This is, after all, the way small businesses have operated for decades: writing out painstaking handwritten receipts, and then filing the carbon-copies away into bulging filing cabinets where they will be nearly impossible to locate in the future. One solution to this problem, of course, is to purchase an expensive invoice software program, but these can be quite expensive and difficult to install and learn. There is a better resolution, however, a much easier and streamlined way in which to handle this common yet vital task, without spending an arm and a leg in the process. Today, thanks to the tools available on the Internet and your personal computer, it is now easier than ever to create your own invoice template using popular programs such as Word and Excel—programs which come standard on many of today’s computers. To help you with this, below we will briefly describe the advantages of creating an Excel or Word invoice template, and outline some of the main elements you will need to include when creating your own reusable form.
Why do I need an Invoice Template?
Before we explain how to use Word or Excel to create your custom and personalized invoice template, let’s first take a minute to go over the advantages of doing so. Some of these include:
• Convenience. The primary reason for constructing an invoice template using Word or Excel is convenience. By modernizing your billing and receipt system you can forever say goodbye to messy and time-consuming written receipts. And because all of your records will be stored as data files rather than hard copies, the process of retrieving that information will be quick and hassle-free.
• Efficiency. The old method of handwritten invoices is archaic to say the least. However, by using a Microsoft invoice template you’ll be able to streamline your business, making tasks such as recordkeeping, bookkeeping, report writing, forecasting and inventory control much easier to accomplish.
• Security. When invoices are stored as hard copies you always run the risk of losing them or having them stolen, but with electronic invoices, all of your company’s sales records can be password protected, allowing access only to those who you trust with that information.
What Information should be Included on an Invoice Template, to Create a Legitimate Invoice?
While most information on an invoice template is fairly standard, the exact headings or fields you’ll need to include will depend largely on the state or region in which you do business. For example, the rate of sales tax businesses must charge will also depend on the state in which you live, as rates can vary between 0 percent and 7.5 percent depending on the state. If you are doing business in California, you must customize an invoice template that calculates 7.5% sales tax. This is not the case if living in Alaska, where no sales tax is charged for most items. Additionally, if you plan to ship items and charge a fee that for that service, you must choose a invoice template that can calculate those fees based on the rate you intend to charge. These differences, however slight, mean you must first do your research before creating an invoice template. To help you get started with the process, below we have outlined some common information that typically appears on the majority of invoice templates:
• Invoice Number. Invoices should be numbered sequentially to help with accounting and record keeping.
• Name and Address of the Business. If you look at any type of invoice examples, you will notice that the name and primary address of the company is always listed near the top of the form. You may also create a company logo for this section, and/or include other identifying details about your business, such as the phone number, fax number, website domain and email address.
• Name and Address of the Customer. Invoices should be included the customer's name, address, phone number, and any other relevant information. When you receive a payment, you'll know whom it's from.
• Description of the Product/Service. For each product or service you sell, there should always be a brief description that identifies exactly what customers are paying for.
• Price for each product. For each product or service you sell, the invoice template should calculate and display a price for that item. This is called the “unit price”—the total price when buying just one of a given product or service. For example, if you own or manage a hardware store, and sell a certain size of screwdriver for $2.00, the unit price for that specific item is $2.00.
• Product Quantities and Price. After listing the unit price of a given product, the invoice template then needs to indicate the number of units being purchased. Using the same example as above, if a customer buys 3 screwdrivers; the invoice template will record the number “3” in the “quantity field. After doing this, the template will then generate a total price for the screwdrivers—calculated as “Unit Price x Quantity.” This process is then repeated with every product purchased in the transaction.
• Sub-Total. As you might have guessed, the “sub-total” field is the total price of a particular transaction before any taxes or fees have been applied. This number is fairly easy for the invoice template to calculate, as it is merely the sum of all the products being purchased.
• Taxes. If the state in which you do business requires you to charge sales tax on the items you sell (which most do), you must include the rate of tax and the total amount being charged to the customer. As we mentioned earlier, this rate will depend on the state, but once that rate is determined and entered into the invoice template, the template can then calculate the total amount of tax owed by the customer using the following formula: “Rate of Tax x Sub-Total.”
• Shipping and Handling Charges. If you plan to ship your products, you will need to choose/create a template that can calculate the shipping costs and any appropriate handling fees.
• Grand Total. Of course, the grand total is the final price the customer must pay. This number is acquired by merely calculating the sum of the various fields—sub-total + taxes + shipping + handling.
• The Payment Due Date. This is one of the most important information of your invoice. It shows when payment should be paid by the customer.
Frequently Asked Questions about Invoice or Invoice Templates
• What is an Invoice?
An invoice (also known as “Bill”) is a document sent by a seller to the buyer. It serves to notify customer of payment owed.
• What is the Difference between an Invoice and a Receipt?
As I said, an invoice serves to notify customer of payment owed, but a receipt serves as proof of completed payment.
• When I Create a Simple Invoice Template, Should I Use Excel or Word?
As we mentioned earlier, an invoice template can be created using Microsoft Excel or Word. However, because Excel is a spreadsheet program, with the ability to calculate formulas, we recommend using Excel invoice template over the invoice template from Word.
• Where Can I Download Free Invoice Templates for My Own Use?
You can download sample invoice template here.