Sending your first invoice is a cause for celebration. So first of all, congratulations! If you are unsure of how to create an invoice or what information to include on an invoice, we’ve created this guide for you. After reading this guide, you’ll be able to create professional invoices quickly and easily.

• What is an invoice
• The essential elements of an invoice
• How to create an invoice with Microsoft Word
• How to create an invoice with Microsoft Excel
• How to create an invoice with online invoice generators
• How to create an invoice with Prospa

What is an invoice?

An invoice is a professional document that includes a list and the total price of products purchased and services rendered to a customer. With an invoice, you can request payment from customers before or after selling a product or service. 

An online shop that sells gadgets, for example, will send you an invoice for payment before shipping you the product. In contrast, if you offer professional services, you can send your invoice at the end of the project. If you are a professional service provider working with a new client, you can protect yourself by requesting a percentage of the total sum before the project.

Does this mean an invoice is a legally binding document? No. You will need a signed contract of service to serve as a legally binding document. But, an invoice serves as a financial record of goods purchased and services rendered. It increases your chances of fast payments, reduces your cash flow problems and ensures you pay your taxes on time.  It’s an essential document to have and can serve as proof of business in certain situations. 

To protect you and your business, you must ensure that every invoice follows the standard invoice format and contains all essential information that makes it a professional document. Let’s get to that.

The essential elements of an invoice

The essential elements of an invoice refer to the information you must include in an invoice that makes it easier for your customer to process your payment request. According to Credit Research information, 61% of late payments are due to compliance or administrative problems such as incorrect invoices.  

By using an invoice format that includes all relevant information, you increase your chances of receiving payments fast and easily.

Here’s what you should always include in an invoice:

• Your business name and contact information:

This includes details like your logo, company name, email, CAC registration number and address.

• Your customer’s name and information:

This includes their names, email, address, phone number and their role if they represent a company.

• Dates that mark the duration of service or when the goods were sold.

• A clear list and description of products sold and services rendered.

• Quantity and price of products and services rendered.

• A unique invoice number:

No two invoices are the same even if the same goods and services were sold to different customers. You can use consecutive numbers to mark them i.e 001, 002, 003 or use alpha-numerics like INV-001. Whichever tracking system you use must be unique and easy to follow.

• Tax information:

In Nigeria, a Value Added Tax (VAT) of 7.5% is paid on all goods and services you render. If you run a sole proprietorship or LLC, include the relevant tax being charged if necessary. Some companies include taxes in their prices.

• Payment terms:

Your payment terms refer to the agreement between you and the customer on how you’ll be paid. Like we mentioned earlier, some service providers prefer to be paid a percentage before they begin. Your payment terms also include when the invoice is due and if you charge a penalty fee for late payment.

• Payment medium:

The payment medium is the channel through which you receive payment Do you accept cheques, bank transfers or do you prefer to be paid via a payment link? Indicate which one works for you and include all the relevant details to get paid faster. 

Does that seem like a lot to remember? Let’s go to how you can create an invoice that includes all the above-mentioned information in 5 minutes or less.

4 Easy Ways To Create An Invoice

Creating an invoice that includes all the above-mentioned information from scratch is time-consuming. In addition, you might place them on the wrong sides of the document. If you are a Prospa member, you can use the invoices feature to create a beautiful and professional invoice in minutes. The secret to making an invoice fast is to use invoice templates. Invoice templates are formatted and ready to use. All you need to do is fill in your details, download and send them to your clients. 

We’ll show you four ways to create quick and easy templates with the Prospa app, invoice generators, Microsoft Word and Microsoft Excel. 

Option 1: Create an invoice with an online invoice generator

Invoice templates are documents often saved as Microsoft Excel, Microsoft Word and Google Docs. So you download the document and fill. But an invoice generator is programmed to create an invoice for you based on the information you fill in online. 

Online invoice generators enable you to create invoices by using a pre-made template. You can also use them to generate invoices on the web and mobile. You’ll only need to fill in the client’s details, items bought, relevant taxes and the total amount.

Pros of using an online invoice generator

• Invoice generators are fast and usually free.
• It serves you if you just need a one-off invoice to send to a customer.
• It’s pre-formatted, so you only need to fill in the necessary information in the available fields.

Cons

• Some popular invoice generators charge you a service fee and a percentage of the total sum as commission.
• The free options do not provide room for customisation.
• You will need to fill in your information every time you use it.

Option 2: Make an invoice with Microsoft Word

Microsoft Word is an easily accessible application that is available on laptops. They have different types of invoices that can meet your needs. Here’s how to make an invoice with Microsoft Word:

• Open your Microsoft Word
• Select the File Menu
• Tap ‘New’ and enter Invoice in the search for template box
• Choose an invoice that fits your needs.
• Fill in the relevant information based on your selected template.
• Give it a second look to makes sure the information is correct. Save your invoice as a PDF and send it to your customer.

Pros of using Microsoft Word

• You can use Microsoft Word whether you have an internet connection or not.
• You have a variety of invoice types to choose from
• It’s free

Cons of using Microsoft Word

• Limited customization options
• Sending invoices is a manual process
• Manual calculation of the price of goods and services.
• You have to duplicate documents every time you need an invoice and fill in afresh
• Manual invoice tracking

Option 3: Make an invoice with Microsoft Excel

• Open your Microsoft Excel Worksheet
• Select the File Menu
• Tap ‘New’ and enter Invoice in the search for template box
• Choose an invoice that fits your needs.
• Using the custom entry fields, enter the relevant invoice information

Pros of creating an invoice with Microsoft Excel

• You can use Microsoft Excel whether you have an internet connection or not.
• You have a variety of invoice types to choose from
• It’s free

Cons of creating an invoice with Microsoft Excel

• Limited customization options
•  Might require advanced Excel skills
• Sending invoices is a manual process
• Manual invoice tracking

Option 4: How to create an invoice with Prospa

Prospa is an app that helps African entrepreneurs open a business account in 5 minutes and manage the financial operations of their businesses. With Prospa you can generate beautiful invoices in minutes. The invoice feature on Prospa allows you to save your business and customer’s contact information, automatically apply tax and generate a unique invoice number.

Invoices are financial documents and a representation of your brand. With Prospa you can create invoices that reflect your business and match your brand identity.

Steps to create an invoice with Prospa

• Download Prospa on your iOS or Android device.
• Create your free Prospa account or sign in with your existing Prospa account.
• Tap ‘invoice’ on the low navigation bar
• Set up your company information: Add your logo, enter your company information (website URL, social media handles, pick an accent colour that matches your brand colours)

Note: You only do this setup once because Prospa stores the information for you. After you’ve created a and But, you can edit and review when needed.

• Review and save. 
• Tap ‘Add Customer’ and select an existing customer from your customer list or tap ‘New Customer’ to enter your customer’s name and email address.
• Tap ‘Add Item’ to add an item from your Webstore or add a custom amount.

Read: How to set up an online store with Prospa’s Webstore

Pros of using Prospa to create invoices

• You can create customised invoices
• It’s easy to save information
• It automatically generates unique invoice numbers
• You can track paid and unpaid invoices in your Prospa app
• Easily send your invoice through email and other social media platforms like WhatsApp
• You can create a business current account in 5 minutes on the

Cons of using Prospa to create invoices

• Though Prospa is free to use, you need to sign up for an account. You can do this in minutes.

Final Thoughts

Using Prospa’s invoice feature can help you improve your productivity and focus on other aspects of your business. According to Levvel, companies who rely on manual processes to manage payment collections from clients spend 15% of their time prioritizing their tasks, 15% gathering information to make a payment collection, and only 20% of their time communicating details with customers about payment. 

However, companies who use automated invoice software like Prospa spend only 6% of their time scheduling activities, 6% of their time gathering information for collection calls, and 62% of their time communicating about payments. 

Creating an invoice with Prospa does not only help you save time, but it also helps you collect payments easily. If cash comes in when it should, you can build a financially healthy business.

Register your business and get a business current account in 5 minutes! To start, download Prospa on your IOS and Android.