$

Amount: $0.00

Subtotal:$0.00

Balance Due$0.00

3 invoices stacked on top of one another

Invoicing 101

An invoice is a payment request for products or services that outlines the price and amount for each item. Invoices are generally 'due upon receipt' even though most businesses allow up to 30 days to pay before charging late fees.

Contents

What is an Invoice?

An invoice is a document that serves as a bill for goods or services. The party requesting payment (seller) creates the invoice, filling out their details, the client's details, a description of goods or services rendered, the total amount owed, and the preferred payment method.

Once complete, the invoice should be delivered to the client (buyer) electronically or via standard mail. To further personalize the invoice and for a more formal presentation, include an Invoice Cover Sheet with the delivery

Brown illustrated stone tablet etched in cuneiform writing

Fun Fact

Etched in cuneiform on a stone tablet, the oldest known human writing is a 5,000-year-old receipt for the sale of clothing. The oldest recorded form of payment was made in beer and documented in the same cuneiform writing.

How to Make an Invoice (7 steps)

The following guide describes how to make a basic invoice using the generator above. You can also start with one of fifteen (15) templates designed by type.

1Upload a Logo

Upload a logo from your device that will be placed on the invoice. It's best to use a logo with square dimensions.

Pop up box on an invoice titled upload logo.

2Company Details

Add your company details, including:

  • Business Name
  • Email
  • Phone Number
  • Website
Bill from box on an invoice outlined in red

3Client Details

Add your client's contact information, including:

  • Individual Name
  • Company Name
  • Email
  • Phone Number
  • name
  • Address
Bill to box on an invoice outlined in red

4Invoice Details

Select an option for the Payment Terms (due date). The Invoice Date (date issued) is populated automatically.

Payment terms and invoice date boxes on an invoice outlined in red

5Description of Goods / Services

Fill out the following fields:

  • Description of Goods/Services
  • Cost per Item or Hourly Rate
  • Quantity/Number of Hours
Sample item and description on an invoice outlined in red

6Calculate Total

Add shipping, custom taxes, and discounts, if applicable. Subtotals and Total Balance Due will be calculated automatically.

Tax and discount section of an invoice outlined in red

7Send to the Client and Get Paid!

Before sending your invoice, select the More button and preview the invoice to proofread the final product. When you're ready to send, select the Send button at the bottom of the page to email the invoice to the client. You can also save the invoice and send a link instead. With an account, you can accept payments by credit card, Venmo, and CashApp.

Invoice Maker payment options — stripe, venmo and cash app

Components of an Invoice

An invoice should be detailed enough to clearly communicate everything the recipient needs to know, yet simple enough to mitigate confusion. Certain fields must be included for the invoice to hold up legally.

Using a template makes it easy to create and customize an invoice with all the necessary fields. Here are the ten essential components of a legitimate invoice:
An invoice with each section numbered 1-8

1.Descriptive Header.

Usually, this will simply read "Invoice." With Invoice Maker, you can also make estimates and receipts which will be labeled as such. Use the dropdown menu at the top left of the form to generate this header.

2.Your Company (Bill From) Details.

This section makes it easy for your client to identify and contact you. Use the legal name, address, and contact information of your business. Add your company logo if you have one. Pro tip: If you're just getting started and have not set up formal business infrastructure, you can use your personal information instead.

3.Your Client (Bill To) Details.

In addition to your client's company name, address, and contact information, it's a good idea to include the name of a specific person who will be responsible for paying the invoice.

4.Invoice Number.

Assigning a number to the invoice helps you and your client keep accurate records. Pro tip: if you're a new freelancer, start somewhere in the hundreds. You can pick any number you want.

5.Date Issued.

It's important to mark down the date on which the invoice is sent. Our invoice generator does this automatically.

6.Terms.

This section dictates when payment is expected. Select the dropdown menu on the right side of the form below the logo field to enter the terms. Choose a number of days or select a date from the calendar pop-out. The Due Date section will populate automatically. If you choose Custom, no Due Date section will appear. Instead, you can spell out the terms in the Notes section at the bottom. Pro tip: agree on all terms before completing a transaction.

7.Items, Descriptions, and Cost Per Unit.

Use a separate line for each good delivered or service rendered. With the invoice generator, you can easily add, remove, or rearrange items. Next to each line item, set the price and quantity. You can add custom fees, taxes, and discounts at this stage.

8.Total Balance Due.

Add up the invoice total and display it clearly on the document. Our free invoice generator automatically calculates subtotals, applies any taxes or discounts, and displays the total amount owed.

9.Notes.

Use this section to include a personal thank-you note, spell out custom terms and conditions, or communicate any other pertinent information you want to add.

10.Payment Instructions.

The recipient should be able to easily discern their options for paying the invoice. You can include instructions in the Notes section, or use our free invoice generator to accept payment via credit card, Venmo, or Cashapp.
3 invoices stacked and pictured next to a clock

How Long to Keep an Invoice (Legally)

As a general rule of thumb, sellers in the United States should hold onto invoices for at least three (3) years. According to the Internal Revenue Service (IRS), an individual or company is required to keep an invoice under the following circumstances:

  • Four (4) years for invoices related to the payment of employees. The 4-year period begins after the date the tax is due or is paid, whichever is later;
  • Six (6) years for invoices that are not reported on your income taxes and represent more than 25% of gross income;
  • Seven (7) years if filed the invoices are related to a claim for a loss from worthless securities or bad debt deduction; and
  • Indefinitely if the invoice was made in a tax year where no filing was made or if a fraudulent return was filed.
A W-2 form pictured next to a W-9 form

Are You Considered an Employee?

There are two (2) legally recognized classes of employment: employees and independent contractors.

Employees

An employee, or "W-2 employee" in the USA, is an individual who performs a service on an employer's behalf in exchange for payment, commonly hourly pay. The employer can control the services to be completed and the method by which they should be done (for example, the work schedule and equipment used). The employer can also control, in most cases, where the employee performs the services.

  • IRS Form W-2 - Must be completed by the employee and given to the employer before employment starts.

Independent Contractors

An independent contractor, or "1099 contractor" in the USA, is an individual who performs a task for an employer in exchange for payment, commonly a fixed price. The employer cannot control how the task is to be completed. The employer also cannot control, in most cases, where the employee performs the services unless the work is at a specific location.

  • IRS Form W-9 - Must be completed by the independent contractor and given to the employer prior to the start of the engagement.

Employee vs Independent Contractor

Each state determines ultimately determines its definition of an employee. Most states rely on the IRS 20-Point Test to determine if an individual is an employee. The table below is an overview of the two (2) classes of employment:
EmployerEmployeeIndependant Contractor
Pays Withholding Taxes (social security, medicare, unemployment, etc.)YesNo
Provides Health InsuranceYesNo
Provides 401(k) MatchingYesNo
Provides PTO (Paid Time Off for vacation, sick leave, etc.)YesNo
Provides Overtime PayYesNo
Controls How Work is PerformedYesNo
Controls Where Work is PerformedYesNo
Controls When Work is PerformedYesNo
Controls Results of WorkNoYes

Online Invoice Generator FAQs

Using an online invoice generator saves you time, keeps you organized, and makes you look more professional.

  • Easy to use: customize the look, contents, and details of your invoice in seconds. Save clients, products, services, and discounts for future use. Duplicate, edit, and send invoices seamlessly so you don't have to start over from scratch.
  • Tracks information: at a glance, you can see whether an invoice is in draft mode, outstanding, or paid. View, edit, and manage all your invoices in one place.
  • Clean look: your recipient gets a beautiful invoice with a modern layout that is easy to understand and act upon.
Using an online invoice generator protects you from having to reveal sensitive information to clients and buyers. The generator takes your privacy seriously and encrypts all of your data so you never have to worry about it falling into the wrong hands.
The branding on your invoice is completely up to you. You can customize the color scheme and add your own logo in our super user-friendly invoice builder. To remove the generator’s branding, go to Settings and toggle this feature off under Invoice Defaults.
When you hit the Send button, your invoice will be delivered to the email address included in the Bill To section. Alternatively, you can send your client a link to the invoice in a separate email.
Yes. You can generate a PDF version of your invoice. It will feature live links in the payment section, just like the webpage version.
Payment states are updated automatically in the invoice generator software. You can also open the invoice and select More to manually mark the invoice as paid, unpaid, or void.