Sole trader invoice

Chapter 12

How to Create a Sole Trader Invoice?

Author: Bhaval Patel

Invoice as a Sole Trader: A Basic Invoicing Guide For Beginners

To prepare a sole trader invoice, you should always explain the price for every service you have provided as a sole trader. Your invoice should clarify that the payment for the services you have delivered is due, and you are ready to receive the payment.

An invoice represents a tool used by a vendor to request payment from a customer. As a sole trader, the sole trader invoice you send to a customer must contain all your business details, as well as that of the client, including your company name, address, email,  invoice number, payment terms, and methods. If your business is registered, add your company registration number on the invoice.

This aspect of the section covers:

  • Why should sole traders prepare professional invoices?
  • What you have to add on a sole trader invoice?
  • Helpful tips for sole trader invoicing
  • How to prepare a sole trader invoice?
  • What bank information should be added to an invoice?

Why Should Sole Traders Prepare Professional Invoices?

All the customers have various needs and requirements – and that is the essential part of operating your sole trader business. It also means you need a sole trader invoice that represents all the services you have provided to your customers. You need to have a free invoice that is flexible, but at the same time, it should not take up lots of time. A sole trader should prepare professional invoices that can help the firm outline the work they have done and the amount you have charged. This will help you run your business smoothly and maintain a professional reputation.

What You Have to Add on a Sole Trader Invoice

When you sell goods or render your services to your customer, the next step is to send a free invoice to your client. Your free invoice should be sent with the right payment details. You should also include tax information, if applicable.

What You Need to Add on a Sole Trader Invoice

All the necessary information to include in the free invoice are:

  • Date of invoice
  • Invoice number
  • The word “invoice”
  • Your business name and address
  • Phone number and contact information
  • Email
  • Your registered business number
  • Your customer’s name and address
  • An explanation of the service your customer is paying for
  • The date you rendered the service
  • Tax if applicable
  • The total cost of your service
  • Payment methods you accept

Helpful Tips For Sole Trader Invoicing

  • As a sole trader, when you send an invoice to a customer, your brand or business logo should appear boldly, as well as your business name showing clearly.
  • Quickly sending invoices means you will get paid sooner than the others.
  • Your terms must be clearly stated to make sure your customer sees it. If you accept different payment methods, let it be known in the invoice.
  • The description of every service you rendered during the job should be explained. If it is a product, describe it and add the quantity you supplied.
  • You help your business send invoices with automated systems or via electronic mail so that you and the customer will have an original copy of the invoice. 
  • Have a follow-up plan, always to remind the customer to make payment when the payment is overdue.

How to Prepare a Sole Trader Invoice?

If you’re sending an invoice for the first time or you’ve been doing so regularly, you need to learn how to prepare an invoice template. Omitting a part of the invoice template will make your customers think you’re not professional enough. You can select pre-existing invoice templates or create a new invoice template using an invoicing solution software to get paid quickly.

When you create invoice templates, you need to follow specific rules that indicate what information needs to be included in an invoice template. The guideline is essential for formatting an invoice template, which is less restrictive. 

An ideal way to format invoice templates is to think about your invoice template as it contains four parts that include certain kinds of information. 

How to Prepare a Sole Trader Invoice

  • The Header – In this part of the invoice template, you can include your business information, client’s details (i.e., company name, address, and contact details)
  • Top right or left – This section should enter information about the particular invoice template, including the word ‘Invoice,’ the invoice number, the date of issue, and due date. 
  • Body: Here, you can include the list of products or services, including the price of each product/service, number of units sold, the cost per unit, product number, the total amount due, and applicable taxes. 
  • The Footer: In this part, you should include the payment terms and conditions, payment method, bank details, and a small thank you note to get paid quickly. 

Following such a handy guide will help you format your invoice template in the easiest way possible. It will also make it easy for your customers to understand how much they will pay and how much they owe.

To prepare a sole trader invoice, use these procedures:

  • Create a blank page in Word program
  • Use your business name and contact details to create a header.
  • Type your customer’s name below the header, make sure it aligns to the left
  • Assign an invoice number and date of billing. The invoice number helps with reference and bookkeeping purposes.
  • Include the product you supplied or the type of service you rendered with the right description and price. The price of each service or product should be at the end of each description. Creating rows and columns will be best for the description.
  • At the end of all descriptions and price tags, calculate the total amount you’re going to be paid and write it down, with tax rates and other discussed fees.

Add all necessary payment details and terms as well as your preferred payment methods.

Bank Details That Should be Added to An Invoice

What Bank Details Should be Added to An Invoice

One of the preferred payment methods is bank transfers; if you want to get paid through bank transfers, you’ll need these details on your invoice.

  • Account Name
  • Account Number
  • Routing Number
  • Business Bank Name
  • Invoice Number

After including these details, you can add your payment terms clearly to get paid. After that, have all the necessary information and terms and conditions, endeavor to add a note, and appreciate your customer for doing business with you.

Afterward, you can introduce them to other services you offer. Showing appreciation to customers will help you maintain the customer relationship and also get them to pay you faster.

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