What Makes Up a Good Invoice?


A good invoice is necessary for a few reasons:

  • It’s a legally enforceable agreement between a business and its clients for services or products rendered and payment owed.
  • It helps to ensure prompt payments.
  • It helps businesses track sales and manage finances.
  • It helps businesses maintain a strong professional image

An invoice is a legal document that can take many visual formats, but a good invoice includes three key elements:

Business and Purchase Order Information

This includes your business name and address, contact details, logo (if applicable), customer’s name and address, the date of the invoice, a unique invoice number, and your customer’s PO#. Making this information readily available ensures accuracy and streamlines the invoicing process.

A Detailed Description of Products or Services

Clearly outline the products sold or services rendered in your invoice. Provide a detailed description of each item along with the quantity, unit price, and any applicable taxes. If there is more than one product or service, list them as separate line items and include the total amount due. If you’re transparent and straightforward in your invoice, you’ll minimize the possibility of payment disputes.

Payment Terms and Dates

Specific payment terms set clear expectations for your clients. Be sure to include the payment due date, accepted payment methods (e.g., ACH, credit card, remittance address, etc.), and any early payment discounts or late payment penalties. This will help ensure a smoother payment process and minimize misunderstandings.

Creating a well-structured and professional invoice is vital to a successful business. By including these key elements, you’ll facilitate timely payments and strengthen your client relationships, thereby helping you maintain a healthy cash flow.


An Example of a Good Invoice


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