How To Send an Invoice in 8 Easy Steps

Running a successful business depends on maintaining healthy cash flow, and that starts with knowing how to send an invoice properly. Yet for many UK business owners, freelancers, and small companies, creating and sending professional invoices remains a challenging task that often leads to late payments and administrative headaches.

Whether you’re just starting out or looking to improve your existing processes, understanding how to create and send invoices correctly is important. Get it wrong, and you could face delayed payments, compliance issues, or even legal problems. Get it right, and you’ll improve your cash flow while maintaining professional relationships with your clients.

Working with qualified accountants or using accounting software with invoicing tools can help ensure your billing processes meet all requirements, but this guide will walk you through the essentials.

Key Takeaways

• All UK invoices must include specific legal requirements, with additional elements needed for VAT-registered businesses and limited companies.
• Professional invoices should be sent promptly after service delivery, with clear payment terms and multiple payment options to encourage timely payments.
• Using dedicated invoicing software or templates helps ensure compliance and reduces errors while streamlining the entire billing process.
• Following up on unpaid invoices requires a structured approach, from polite reminders to formal late payment notices.

Why Accurate Invoicing Matters

Proper invoicing goes beyond simply getting paid. There are several advantages to getting your invoicing right every time.

Legal compliance

Creating compliant invoices isn’t optional in the UK. HMRC requires specific information on all business invoices, with additional requirements for VAT-registered companies. Failing to meet these requirements can result in penalties, delayed payments, and potential tax issues during audits.

Professional reputation

Your invoices represent your business just as much as your products or services. Professional invoices demonstrate reliability and attention to detail, while poorly constructed ones can damage client relationships and trust. Consistent, well-formatted invoices help establish your business as organised and dependable.

Cash flow management

Accurate invoicing directly impacts your business’ financial health. Clear, properly formatted invoices typically result in faster payments, while unclear or incorrect invoices often lead to payment delays and time-consuming query resolution. Good invoicing practices help maintain a steady cash flow and reduce the time spent chasing late payments.

Essential Elements of a UK Invoice

Every invoice issued in the UK must contain certain information to be legally valid. Here’s what HMRC requires on all standard invoices:

• The word ‘Invoice’ clearly displayed
• A unique invoice number that follows a logical sequence
• Your business name and address
• Your customer’s name and address
• The date the invoice is issued
• The date the goods or services were supplied (if different from the invoice date)
• A clear description of what you’re charging for
• The amount(s) being charged
• The total amount owed
• Your payment terms
• Your contact information
• Purchase order number (if applicable)
• Payment instructions (including bank details)

Limited company requirements

Limited companies must include additional information on their invoices. If you operate as a limited company, you must also include:

• Your complete company name as it appears on your certificate of incorporation
• Your registered company number
• Your registered office address
• If you choose to list director names, you must include all directors

VAT invoice requirements

If your business is VAT registered (mandatory when your taxable turnover exceeds £85,000), you must issue VAT invoices. There are three types of VAT invoices, each serving different purposes:

1. Full VAT invoice

Required for most business transactions, a full VAT invoice must include all standard invoice elements plus:

• Your VAT registration number
• The tax point (time of supply) if different from the invoice date
• VAT rate charged per item
• Total amount excluding VAT
• Total VAT amount
• Total amount including VAT

2. Simplified VAT invoice

Can be used for retail supplies under £250 and must show the following:

• Your business name, address, and VAT number
• Time of supply
• Description of goods/services
• Total including VAT
• VAT rate charged

3. Modified VAT invoice

Used for retail supplies over £250, requiring the same information as a full VAT invoice plus the VAT-inclusive price for each item.

Sending an Invoice: Step-by-Step Guide

While it might seem straightforward, there’s more to sending invoices than simply listing items and prices. Let’s walk through each step of creating and sending an invoice that gets you paid promptly.

1. Choose your method

Efficient invoicing starts with choosing the right creation method. While many businesses begin with basic invoice templates in Word or Excel, dedicated invoicing software often proves more valuable as your business grows. These platforms can create professional invoices, track payments, and send automatic reminders.

Consider your business volume and complexity. If you’re sending just a few invoices monthly, a template might suffice. However, if you’re handling multiple clients with varying payment terms, investing in proper accounting software can save countless hours and significantly reduce errors. Popular options include QuickBooks, Xero, and FreshBooks, each offering different features to suit various business needs.

2. Gather and input the required information

Before creating any invoice, take time to collect all necessary information. This preparation phase often gets rushed, leading to errors that can delay payment. Start by confirming your customer’s correct billing details—you’d be surprised how often invoices get delayed simply because they were sent to the wrong person or department.

Ensure you have accurate purchase order (PO) numbers if your client requires them. Many larger companies won’t process payments without matching PO numbers, so this small detail can make the difference between prompt payment and lengthy delays. Also, gather all relevant service dates, project milestones, or product details that need to be included.

3. Create clear item descriptions

The description section of your invoice often causes the most confusion for clients, leading to payment delays. Rather than using vague terms, provide specific details that clearly link the invoice to the work completed.

For instance, instead of ‘Marketing Services – March,’ write ‘Social Media Management Services – February 2025, including daily posts on Facebook, Twitter, and Instagram as per agreement dated 15/02/25.’

4. Set your payment terms

Payment terms can significantly impact how quickly you get paid, yet many business owners don’t give them enough consideration. While 30-day payment terms are standard in the UK, you’re not obligated to offer this length of credit. Consider your cash flow needs and industry standards when setting terms.

Many successful businesses are now opting for shorter payment windows, such as 14 days or even ‘due upon receipt.’ Whatever terms you choose, express them clearly on your invoice, both as a specific due date and in terms of days. For example: ‘Due by: 15th April 2025 (14 days).’ This clarity leaves no room for misinterpretation.

Early payment discounts can be an effective tool for encouraging timely payments, though they should be used strategically. A small discount of 2% to 3% for payment within seven days can be enough to motivate prompt payment from some clients, potentially improving your cash flow despite the slight reduction in revenue.

5. Provide clear payment instructions

Making it easy for clients to pay is another way to promote timely payments. Bank transfer remains the most common payment method for UK businesses, but considering additional options like credit card payments or direct debit can make it more convenient for your clients. The easier you make it to pay, the faster you’re likely to receive payment.

When providing bank details, format them clearly and consistently. If you’re sending invoice emails, consider whether to include bank details in the email body or just on the invoice itself—many businesses prefer to keep sensitive information contained within the invoice document for security reasons.

If you ever plan to take international payments, include your IBAN and SWIFT/BIC codes. Even if you don’t have international clients at the moment, having this information on your invoices prevents delays if you do expand internationally. Also, ensure your invoice clearly states which currency you’re billing in to avoid any confusion or exchange rate disputes.

6. Timing and method of sending

The timing of your invoice can significantly impact how quickly you get paid. ‘The sooner you invoice, the sooner you get paid’ holds true, but there’s more to consider than just speed. If you send an invoice late on a Friday afternoon, it might get buried in weekend emails. Similarly, sending at month-end when accounting departments are busy with other tasks might delay processing.

Most businesses find Monday through to Thursday mornings optimal times for sending invoices, as this allows time for any immediate queries to be addressed. When sending via email, use a professional subject line that makes it easy for clients to find and process your invoice. A consistent format like ‘Invoice #1234 – [Your Company Name] – [Project Name]’ helps clients organise and locate your invoices efficiently.

7. Creating an effective invoice email

Your invoice email is just as important as the invoice itself. Keep the message professional but concise—there’s no need for lengthy explanations if the invoice details are clear. A simple template might read:

‘Dear [Name],

Please find attached invoice #1234 for [brief description of work] completed on [date].

If you have any questions about this invoice, please don’t hesitate to contact me.

Kind regards, [Your name]’

Always send invoices from your business email address as PDF attachments rather than Word or Excel files. PDFs are more secure, can’t be easily altered, and maintain their formatting across different devices and systems. Some businesses also include their terms and conditions as a separate attachment, particularly for new clients.

8. Following up on unpaid invoices

Even with perfect invoicing practices, you’ll likely encounter late payments occasionally. Having a structured follow-up process helps maintain professional relationships while ensuring you get paid. Start with gentle reminders a few days before the due date—this proactive approach often prevents late payments altogether.

For overdue invoices, begin with a polite email enquiry asking if there are any issues with the invoice that are preventing payment. Often, late payments result from simple issues like lost invoices or internal processing delays.

If payment remains outstanding after several reminders, you may need to escalate the situation. The UK’s late payment legislation allows businesses to claim interest and debt recovery costs on overdue invoices. However, consider the long-term relationship value before exercising these rights. Sometimes, offering a payment plan or having a frank discussion about payment timelines can be more beneficial than immediately pursuing legal options.

Your follow-up process should be consistent and documented. Keep records of all payment-related communications, including when reminders were sent and any responses received. This documentation is important if you ever need to take legal action to recover payment.