You’ve done a great job, the client is happy, and now all that’s left is to collect what you’re owed and be on your way. So far, so simple, right?
Sure, it should be, but if you’re new to running your own tradesman business, the process of putting together a proper invoice to make sure you get paid can be enough to leave you with plenty of questions:
- How do you know that you’re including all the necessary information?
- What’s the best format or layout for your tradesman invoice?
- Is there anything that you’re legally obligated to include on an invoice?
Today, we’ve tasked the business experts here at Tradesman Saver with putting together this complete guide to the art of invoicing, containing everything you need to include to make life easier for both you and your customer.
Tradesman invoice essentials
Whether you’re fixing a dodgy sink or building an entirely new house, there are a number of items that the government says you absolutely have to include on your invoice.
These include:
1: The word ‘Invoice’
It’s essential that you display this word very clearly on your document. Most experts recommend including right at the very top so that it’s absolutely clear what this document is.
It may sound like a small thing, but in a worst-case scenario, this simple word could make all the difference should you end up in a legal dispute with your customer, so don’t forget to include it.
2: Your company name and contact information
This includes your address and at least a telephone number, though you may find it helpful to include an email address as well.
3: A unique ID number for each invoice
This could be as simple as “INV 001” or “123.”
Not only is this number essential, it could also prove very handy come tax return time if you need to find a particular invoice.
4: The supply date
The date (or dates) that you carried out the work you’re invoicing for.
5: The invoice date
Quite literally, the date you give the invoice to your customer.
6: A clear description of the services you provided
List each service or product separately and clearly describe which one is.
So “plumbing work,” won’t cut it, whereas “fixing a burst pipe,” or “installing new bathroom” will be better.
7: The amount being charged for each item
Keep things simple by writing the costs down next to each product or service you’re charging for.
8: The total amount owed
Finally, add up all those individual amounts to create the total cost of your work.
Invoice essentials for sole traders
Along with all of the above, if you’re registered with a sole trader you’ll also have to include your own name, even if you use a business name. If, for example, you market your services as A1 London Plumbing, then when you list your name and contact details, you’ll need to write something like:
Joe Smith
A1 London Plumbing
You’ll also need to include an address where legal documents can be sent. In most cases, this may well be your home address.
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Invoice essentials for limited companies
If you run a limited company, then you need to list your company name exactly as it appears on your certificate of incorporation. You aren’t obligated to include the names of the directors on your invoice, but if you decide to do so, you have to include the name of all your directors.
In other words, no – you can’t leave Dave off the list just because he’s a bit of a numpty.
What about VAT?
If you’re VAT registered, you’ll also need to include some extra information about the amount of VAT, as well as your VAT number. The government has a handy table which details exactly what information you need to include on your VAT invoice.
Other important details to include on your invoice
If you only include the details listed above, you can go ahead and issue your invoice, safe in the knowledge that you’ve done everything you must do. But as the old saying goes, just because you can, doesn’t mean you should.
Sticking to the bare minimum essentials may keep you out of trouble with HMRC (or a disgruntled customer’s lawyer!), but if you want to make the whole payment process as easy as possible for both you and your customer, there are some other things you should consider adding to your tradesman invoice.
These include:
Your payment details
It makes life much simpler for everyone and can help reduce delays in payment if your customers know exactly where to send your money to.
Payment due date & payment terms
These aren’t essential but they can prove invaluable in minimising delays. For most simple jobs, you may simply list one payment due date with the understanding that the customer will pay in one lump sum by that date.
For larger jobs, you may have reached an agreement with your client that they can pay you in instalments. You’ll both find it helpful if you detail this on your invoice to reduce conflicts or complications down the line.
Your company website & logo
Okay, so these might not make life any easier when it comes to getting paid, but they can help tremendously in creating the right professional presentation which speaks volumes about the quality of your business.
Even small details like a website address and logo can go along way in creating a memorable impression with your customers, the kind of impression that has them coming back to you time and time again and, of course, recommending your business to others.
What challenges have you faced when it comes to invoicing your clients? Let us know in the comments below, or share your top tips for better invoicing with us via Facebook or Twitter.
Tradesman Saver also provides insurance for tradesmen covering a wide variety of professions. For further information, please see our who we cover page.
