How to generate an invoice

Why a trade business needs to generate an invoice

Invoices are a formal document that is a record of the work you’ve done and how much you charged for it.

Invoices are a key part of your trade business accounting records. If you don’t invoice your customers for every job then your bookkeeping will be inaccurate.

You need to generate an invoice for every job you do. Keep one version for your business records and give one to your customer for their records.

Different ways you can generate an invoice

An invoice contains information about a job and how much you have charged.

This tends to include:

• Generating a unique invoice number
• The date
• Description of your services
• The customer’s details

There are different ways to put this information into an invoice, so keep reading to work out which would be best for your business.

Manual invoicing

Writing invoices by hand on a pad is very much ‘old school’ nowadays. Giving the customer the original and keeping the duplicate for your records is inefficient. And it isn’t very environmentally friendly.

That said, there’s nothing wrong with manual invoicing – so long as you keep on top of the admin it creates.

If you only generate an invoice occasionally in your work, then doing it manually might make more sense.

When you’re looking at how to generate an invoice number, you need to be careful. Make sure they follow in numerical order.

As a trade business owner, you can create manual invoices by:

Using a pre-printed invoice ‘book’

This contains a series of sequentially numbered invoices. Each has a duplicate. When you handwrite on the original, what you write is reproduced on the duplicate version underneath.

Give the original to the customer in person or post it to them. Keep the duplicate for your business records. The question of how to generate an invoice number is answered for you – it will already be on the paperwork.

Writing the invoice yourself

Instead of using a pre-printed invoice book you can write the entire invoice by hand. This means you also have to add the invoice number.

The question of how to generate an invoice number is trickier if you write everything yourself. Each invoice must follow in sequence.

This ensures you record all of your sales. You’ll need to keep track of invoice numbering so you don’t issue the same number twice by mistake.

If you’re registered for VAT, you’ll need to calculate what to charge customers yourself. Remember, too, that HMRC requires trade businesses to keep accurate VAT records.

Digital invoicing

Like many aspects of business life, going digital with your invoicing makes things easier. Software to generate an invoice does all the hard work for you.

These are the main advantages of going digital with your invoicing:

• Save time and hassle
• Get paid quicker by sending invoices as soon as jobs are finished and tracking their status
• Improve the accuracy of your bookkeeping
• Reduce the chances of mistakes on invoices
• Improve the consistency of your invoicing
• Calculate VAT on invoices automatically
• Keep track more easily of who owes you money
• Save money by not having to buy stationery for invoicing
• Save money by not having to post invoices to customers
• Reduce your environmental impact by using less paper
• Give customers a better, faster service when you invoice them

When done digitally, invoices can be generated automatically, each with its own sequential invoice number. If you are registered for VAT, this is calculated automatically for you.

Using software to generate an invoice

Checkatrade members can benefit from using our quoting and invoicing tool.

It allows you to generate invoices easily at the touch of a button. You can use the tool whenever you like, so it’s handy as well. It can even be done while you’re on a job from the handy trades app.

Once the work is done, you convert a quote into an invoice and send it to the customer by email or text. Your invoice will include a breakdown of all the costs they agreed on in the quote.

There is lots of other software to generate an invoice. Many are aimed at sole traders and small businesses.

You’ll find that many offer discounts on the monthly charge for the first few months. Generally speaking, they all allow you to personalise invoices and track their status. That way, you can check when you’ve been paid and chase up later payers.

The main providers of software to generate an invoice include Quickbooks, Sage and Xero.

How to generate an invoice for free

If you use software to generate an invoice, you’re likely to have to pay for the service. However, some software is free to use.

Creating invoices manually won’t cost you much. But, as we’ve said above, digital invoices are better for lots of reasons.

For Checkatrade members, our quoting and invoicing tool is free to use.

Free invoice templates

Free software is available without a subscription. You can download free templates.

But bear in mind, these won’t connect to your accounting software or your bank account like the software we talked about above. That could mean extra work for you recording your invoices.

You probably won’t receive any help or support from the software provider either. You can generate an invoice for free from many software providers, including Adobe, Xero, Brisk Invoicing and Zoho.

More work means more invoices

Knowing how best to generate an invoice is only one part of running a successful trade business. Winning more work will keep you busy generating plenty of invoices!

With a Checkatrade membership, as well as a listing, you can also receive our help with new enquiries.

There are lots of other benefits to consider when it comes to signing up with Checkatrade. They include:

• Dedicated membership advice team
• Work guarantee up to £1,000 (T&Cs apply)
• Exclusive offers and discounts
• Up to 20% off Public Liability Insurance
• Fantastic savings on Quickbooks software
• Reduced cost of workwear and branding
• Savings on other business essentials such as vans, fuel and materials

Key takeaways

• Trade businesses need to generate an invoice for each job they do
• You need invoices to give customers so you get paid for your work
• Invoices are used to calculate your trade turnover and work out what tax you owe
• You can generate an invoice manually or digitally
• Going digital is more efficient and accurate (it can also save you money and help you get paid on time)
• Checkatrade members can use our free quoting and invoicing tool
• Other software products available are aimed specifically at sole traders and small businesses
• You can download free invoice templates, but you won’t be able to link these to your accounting system

When it comes to invoicing for your work, you need to make sure you do it right. And if your customer is refusing to pay, why not read our guide to help you know your rights.

* Terms and conditions apply – please see this article for more details