How to Draft an Invoice

What to include when drafting an invoice

By Kate Josselyn

To draft an invoice, include a clear title, your business and client details, an itemised list of services or goods, costs (including VAT if applicable), a total amount due, and your payment terms. Adding an invoice number and date helps with tracking and ensures clarity for both parties.

Business owners often take it for granted that their invoices will be paid - and paid on time. Unfortunately, this isn’t always the case so it's important to include these key details to help ensure payment.

Why it’s important to get invoices right

Many business owners assume their invoices will be paid promptly, but that’s not always the case. A clear, well-structured invoice improves your chances of being paid on time, helps avoid disputes, and makes it easier to chase late payments if needed.

It’s not just about getting paid either. Invoices are legal documents and form an important part of your business records. Drafting them properly also helps with accounting, tax, and cash flow planning.

What to include when drafting an invoice

1. Start with the basics

Add a bold, central title at the top of the document: Invoice. Then, clearly display your business name, address, and contact number – usually in the top-right corner.

On the left, include your customer’s details. Make sure you’re invoicing the correct individual or company, especially if you may need to follow up or take enforcement action later.

Always double-check the spelling of company names and include any relevant reference numbers or purchase order (PO) numbers.

2. Add invoice details

Your invoice should include:

The invoice number (e.g. FLEX-001)
The invoice date
The due date (based on your payment terms)

Invoice numbers help track payments and keep your records organised. Make sure your numbering is consistent – for example, FLEX-001, FLEX-002, etc.

3. Itemise your services or products

In the body of the invoice, list what you’re charging for, ideally in a simple table format. Include:

A description of the service or product
The unit cost (if relevant)
Any expenses
The subtotal
VAT (if applicable)
The total amount due

For example:

Item	Cost
Provision of IT services from 11th August to 31st August at £200/day	£3,000
Subtotal	£3,000
VAT @ 20%	£600
Total	£3,600

If you’re VAT registered, make sure your VAT number appears on the invoice and that VAT is calculated accurately.

4. Set out your payment terms

At the bottom, clearly include your:

Payment terms (e.g. “Payment due within 14 days”)
VAT registration number (if relevant)
Registered business name and address

This is essential for legal reasons and can help in the event of a dispute. You can also include:

Accepted payment methods (e.g. bank transfer, PayPal)
Any late payment charges or interest you’ll apply
Instructions for what the customer should do if there’s a query

Common mistakes to avoid

When drafting invoices, try to avoid:

Forgetting to include payment terms
Omitting VAT or using the wrong rate
Using inconsistent invoice numbers
Misspelling the client’s name or business
Leaving out your own contact information

Even small errors can delay payment or cause confusion.

Tools to help you draft invoices

If you’re creating invoices manually in Word or Excel, consider switching to invoicing software or apps like:

These tools help automate calculations, save templates, and keep records tidy.

Who needs to draft invoices?

Invoices aren’t just for big businesses. If you’re a:

Freelancer
Sole trader
Small business owner
Contractor

...you’ll likely need to create and send invoices regularly. The process is largely the same regardless of business size, though larger companies may have more formal purchase order or procurement systems in place.