B2B Sales

Sales Invoice Templates and Best Practices

Sales invoices are some of the most important documents that businesses use in their daily operations. 

However, if you’re not as experienced in creating invoices or don’t fully understand their value, this guide is just the thing you need. 

By the end of this guide, you’ll understand the full importance of these documents and have all the templates you need to create successful invoices for your sales. 

What Is a Sales Invoice and Why It’s Important 

Regardless of your industry, sales invoices play a huge role in your everyday business.

A sales invoice is a document you send to your clients to inform them of how much they owe you for your service or product. 

They include all the important information about the sale you made to a customer. 

Sending invoices to your clients is a crucial everyday practice. Such documents are incredibly important for both you and your clients because of the data they contain. 

A typical sales invoice includes the information you need to safeguard your business against unproven lawsuits, as well as all the figures for your accounting and revenue calculations.

As such, they are the basis for filing tax returns. 

This data is essential for any business that has to keep a record of its sales. You’ve probably received numerous sales invoices yourself.

They are vitally important because they allow sellers to request payments from their customers and provide a full breakdown of the goods or services that have been bought. 

The Purpose of a Sales Invoice 

As we’ve stated before, sales invoices are essential for any business that requires record-keeping and calculating of any kind. 

Business owners use sales invoices to track their sales revenue and expenses, request payments from their customers, as well as manage inventory. 

Without invoices, business owners would not be able to stay on top of the money and items going through their business.

This would leave them unable to fulfill their legal obligations.

The moment a sales invoice arrives in the company’s inbox, they have a crystal clear breakdown of how much they owe, so they can make the payment and the transaction can be complete. 

Sales invoices play a major role in businesses being paid on time, which is vital for their revenue streams. 

To illustrate this point, let’s look at an example. 

Imagine your business got an order from a client for an X amount of different products. 

By sending a sales invoice, you would provide your client with three of the most vital pieces of information they need: the list of the goods they bought, their full price with taxes included, and the final date for payment. 

Thanks to the invoice, the client would be able to make the payment and have proof of it. 

Keep in mind that a sales invoice isn’t the same thing as the bill of sale—which brings us to our next point. 

Related: Sales presentation templates

Sales Invoice vs. Bill 

Despite containing the same pieces of information, there are a few fine differences between a sales invoice and a bill of sale. 

Sales invoices always precede the bill. 

An invoice is a document that the seller issues to the buyer before the purchase, while a sales bill is issued later, as proof of payment. 

In other words, both documents have identical pieces of information but are not issued at the same time.

Furthermore, bills and invoices are not used the same way by the two parties in a transaction. 

Invoices are used by sellers to collect money from their customers, while bills are used by those customers as payment referrals. 

So, as we’ve said, while both have the same info and numbers, they have different purposes. 

Does this sound confusing? Let’s break it down with an example.

Say a business sends an invoice to their client. 

The client regards the invoice as proof of sale, with all the vital info needed to make the payment. 

After the client pays the amount she owns, the seller issues the bill as proof of the payment. 

Thus, the transaction is complete. 

Therefore, despite both documents containing the exact information, they have different uses and are not issued at the same time. 

Sales Invoice vs. Sales Order 

You might also wonder what the difference is between a sales order and a sales invoice. 

As with the sales bill example, there are a handful of subtle differences that you should know about. 

A sales order is a document created by the client or buyer when she wants to make a purchase of a product. This document is viewed as a request for sale and contains the goods the client wishes to buy. 

Unlike the sales invoice, the order is initiated by the buyer. 

Conversely, a sales invoice is issued by the seller, so they can request payment from the buyer. 

It’s a document that describes the number of goods and their respective prices with calculated taxes and dates for payments. 

Unlike the sales order, an invoice is used to finalize the transaction, instead of initiating it. 

In a typical business environment, this is how things would go down:

  • If a business needed products, they would send a sales order to the seller, disclosing what products they want to buy and in what quantities. 
  • The seller would then send them a sales invoice, so the products could be paid for. 

And that’s pretty much it. 

As you can tell, a sales order is sent at the beginning of a business interaction, while the invoice is issued as the transaction moves to a close. 

Read more: Sales proposal templates

What Does a Sales Invoice Include? 

What makes a sales invoice such an important document is the information it contains. 

A sales invoice contains all the information that both the seller and the buyer need to fulfill their legal obligations. 

Since every business sale has to be taxed, invoices have taxes included for every item and are used by accounting. 

In addition, in case of a legal dispute, they are some of the most important documents you can present in court. 

An invoice also has trackable information and data that is valuable to both parties. 

When you have data such as quantities of sold goods, transaction dates, and prices listed, it’s immeasurably easier to keep track of the inventory and revenue your business is dealing with. 

As such, using sales invoices is a must for any modern business. 

When it comes to its content, your typical sales invoice would include:

  • A list of bought items or services
  • The total price of bought goods or services
  • The sales tax
  • The final date by which the goods must be paid

This collective data is the fundamental information that describes a transaction, and its role in everyday businesses can’t be understated. 

Sales Invoice Templates for the Most Common Invoice Types 

There are many sales invoice templates out there and picking the perfect one for the specific needs of your business can be a challenge. 

Here is where we step in. 

In this section, we’ll be going through templates for the most common types of sales invoices. 

Commercial Invoice Template

A commercial invoice is essential in the business of international trade. 

It is a legal document that the exporter issues to the importer during an international transaction. 

A commercial invoice is absolutely mandatory since it acts both as a proof of sale between the two parties and as a contract of sale. 

If you want to do business internationally, you have to get familiar with commercial invoices. 

We have to note that a commercial invoice doesn’t include the ownership of the goods that are being sold, but it does hold all the key information concerning both parties in the trade deal. 

Regardless, it’s mandatory if you want to get customs clearance because the officials need it to calculate the taxes and similar fees. 

Talking about various different invoices can be confusing, so here’s a template of a commercial invoice provided by Sendcloud.

As you can tell, it contains key info regarding the goods that are being shipped, their value, and the information about the shipper/consignee. 

Now it’s time we talk about recurring invoices and their use in sales. 

Recurring Invoice Template

A recurring invoice is a particularly important document for businesses regularly doing trade with the same customers.

Automating your invoices with software solutions is a time-efficient way of doing business. 

When you repeatedly do business with a particular customer and enter the same details on every invoice, you can use recurring invoices to expedite the process. 

Thanks to recurring invoices, managers and administrators don’t have to spend time filling out every single invoice form and can easily focus on more complex tasks. 

A major benefit of recurring invoices is that they eliminate mistakes. 

Since they are generated using software tools, there’s no risk of human error, which saves businesses a lot of trouble. 

If you rely on handwritten invoices, when one is not filled correctly, you can end up having to deal with a variety of disrupting and costly issues. 

This is what a recurring invoice template looks like, provided by Invoice Templates.

It includes the same basic information as a regular sales invoice, but invoice tools fill them in automatically and prep them for sending. 

To avoid all the risks of error that come with filling in invoices, as well as save precious time, you should consider using a recurring invoice template. 

Pro Forma Invoice Template

Pro Forma invoices are special types of invoices that act as a preliminary bill of sale and are sent in advance before the products have been shipped. 

A typical Pro Forma invoice has just about enough information for customs officials to determine the content and value of the invoice, i.e., quantity, weight, and the price of sale, as well as the necessary info about both parties the transaction. 

Keep in mind that Pro Forma invoices are not official payment demands. 

Rather, they are documents you send to clients ahead of shipping in order to estimate the full costs of the shipping so the client can avoid any unexpected costs.

Businesses use Pro Forma invoices when they’re doing business with a customer for the first time, and they need to meet the international approval process. 

Sending Pro Forma invoices is regarded as a professional move when doing business with a new client. 

This is an example of a Pro Forma invoice template from Hloom. 

This template has required company info, product description, quantity, individual unit price, and the total value of the shipment. 

Every business that relies on international shipping services should make an effort to write Pro Forma templates for their new clients. 

Interim Invoice Template

Interim invoices are particularly important for small businesses because they are an accounting tool for invoicing a client over a long-term project. 

An interim invoice is used to establish cost estimates for an upcoming project and submit the details to the client. 

A well-written interim invoice will disclose all the details regarding a project that impacts its cost. After reading the interim invoice, your client will have a full estimate of the project, its schedule and agreed payment methods. 

The largest benefit of interim invoices for small businesses is that it ensures they get paid throughout the project. 

As agreements, interim invoices disclose the payment schedule until project completion, so small businesses can maintain their cash flow. 

In effect, this drastically reduces the risks of not getting paid that small businesses often have to face. 

An example of an interim invoice template is provided below, compliments of Hellobonsai.

As you can see, an interim invoice contains an estimate of project costs, methods of paying, and a payment schedule. 

If you’re a small business about to take up long-term projects, you should not neglect using interim invoice templates.

Credit Invoice (Credit Note) 

It’s not uncommon for businesses to have to refund their invoices or offer credits in their value, which is why businesses have to know how to use them as part of their invoicing process. 

A credit invoice is a document that discloses the details regarding a refund or credit of an invoice. 

When the amount from the sales invoice is reduced from the original, businesses use credit invoices to start the refund process. 

Since the original cost can be reduced for many reasons, businesses must know how to write credit invoices or credit notes.

Can you think of a time when something happened that reduced the original cost of a transaction, so it had to be corrected?

A credit invoice or a credit note is used to make that correction. 

Being well-versed in writing invoices will speed up your refund process and reduce any delays that it might cause. Trust us—your clients will appreciate it. 

To get a clear picture of what a credit invoice looks like, check out this example from Invoice Home.

Invoices like this one are used to refund or credit an invoice, detailing the amount that is to be credited or refunded. 

It’s time we talk about debit invoices.

Debit Invoice (Debit Memo) 

A skilled administrator knows the value of debit invoices or debit memos. 

Doing international business invites situations that can affect the price of the transaction. 

Similar to credit invoices, debit memos are tools for readjusting the price of a transaction, so the correct payment can be finalized. 

They allow you to quickly adjust prices in case the costs from the original invoice change due to some unforeseen circumstances. 

By now you probably understand that debit invoices are quite necessary for regular businesses, let alone international transactions. 

They are used on three different occasions:

  1. During transactions between banks and companies, when the account balance is decreased because of bank service charges or fees.
  2. In B2B transactions, in case a service is erroneously under-billed, so it has to be corrected and readjusted. 
  3. In case of an internal offset, like when a client over-pays a service or a product by accent so you can issue a debit memo to even the account balance. 

Now that we’ve talked about what debit memos are and when they are used, let’s take a look at a practical template example, this time by Template.net

A great debit invoice template will include the reason an adjustment of price is made and list the sum that needs to be readjusted. 

And now for the final invoice type on our list, the infamous past due invoice. 

Past Due Invoice Template

A past due invoice is a type of invoice that is sent once the date of payment has been exceeded without being settled.

Unlike other invoice types, past due invoices are often sent via email to customers so you can inform them they’re past their deadline. 

In case they fail to make the payment, businesses have to shift towards a bold tone in which they will inform them of the following steps if they fail to make the payment. 

Unfortunately, clients not paying their dues in time is not an uncommon occurrence, which is why it’s important for businesses to know how to create and use past due invoices. 

It goes without saying that collecting past due invoices is of utmost importance—not doing so can seriously disrupt a company’s cash flow. 

Writing an effective past due invoice is hard, but we’re here to help. This is a template for such an invoice. 

A past due invoice has to maintain a formal tone, remind the customer of their obligations and direct their further actions. 

We hope you won’t have to write these to your customers, but it’s always a good idea to have one at hand.

Tips for Effective Sales Invoices 

Here are our top 4 tips for creating effective sales invoices.

1. Send Them at the Right Time 

Knowing when to time your sales invoices is crucial. 

Usually, the best way to go about it is to send sales invoices to customers either shortly after the job is done, or issue them on the spot. 

This is because of the simple fact that people expect to pay after the service is performed or the product shipped out.

However, this isn’t always the case. 

In case you’re doing business with a regular customer, it’s almost always appreciated if you send them an invoice at the end of the month. 

This makes regular payments a matter of routine and is seen as a sign of trust. 

Depending on the type of job you do and the relationship you have with the customer, you can choose between monthly, on-the-spot, or follow-up payments. 

2. Write Clear Product Descriptions 

It goes without saying that product descriptions must be filled out in an understandable manner. 

An unclear product description can hinder timely delivery, especially if it causes the product to be hauled at customs and disrupts the entire transaction. 

Therefore, make a habit of writing accurate and clear product descriptions so the person reading the sales invoice can quickly understand all the details regarding the product that’s being transported. 

A well-written product description conveys what product is being sold, at what quantity, and at what price. 

This is considered essential business knowledge and culture. 

3. Include a Variety Of Payment Options 

As you’re well aware, there are a variety of different payment options and methods available for businesses nowadays. 

When writing a sales invoice, make sure you include at least several different payment options so that your client can pick the one that suits them best. 

Various payment methods have improved so much over the years, which means there’s no need for you to skip out on them. 

Allowing several payment options gives you a competitive advantage over similar businesses that are not as flexible, and you should capitalize on that fact. 

4. Keep Your Invoices Well-Organized 

Just like any critically important documentation, your sales invoices have to be well-organized and easily accessible. 

As we mentioned earlier, sales invoices are crucial business documents, both for customs and customer interaction. 

Doesn’t it then make perfect sense to have them organized so every team member can access them with ease in case they’re needed?

Every organization that is serious about its business should make an effort to keep its invoices well-organized.

You can use various tools to organize your sales invoices, as long as they are kept safe and made easy to access. 

Conclusion 

In this guide, we’ve discussed in great detail the importance of sale invoices and their many different types. 

You’ve probably seen your fair share of sales invoices, but now you have a broader understanding of their purpose, which brings us to our final point.

Think about your company’s invoice practice and the ways you can improve it to the benefit of your business. 

Keep in mind that sales invoices are not just documents but tools that can be used to improve and help your business.