What is an Online Invoice?
An online invoice is a web-based invoice template you can customize and send to clients. Some online invoices offer payment integrations, so your customers can pay using a credit card, PayPal, and other methods.
While online invoices are web-based, most platforms allow you and your clients to download a PDF invoice and print it for record-keeping.
What to Include in the Online Invoice
Most online invoice makers will offer several fields and sections for you to customize. Here are some of the essential elements of any invoice.
Every new invoice must have a unique number for record-keeping purposes. While there are no rules for invoice numbers, we do recommend some best practices:
- Use a descriptive prefix to differentiate from invoices, quotations, and other financial documents you send to customers—for example, INV for invoices and QUO for quotes.
- Keep a record of your invoice numbers in a spreadsheet and increment sequentially to avoid confusion.
- It's a good practice to include a minimum of four digits in your invoice number, even when starting from one–for example, 0001, 0002, etc.
Your Company Name & Contact Details
Every invoice must include your business info and contact details. If you're invoicing as a freelancer, include your name as it appears on your personal tax identification number with your local government. Your business name and contact details should include:
- Business logo (optional)
- Registered and trading name (if applicable)
- Business address
- VAT/TAX number (in some countries, this is a legal requirement)
- Phone number
- Email address
- Website (optional)
- Primary contact/salesperson (optional)
Your client's details will include the same company information we outlined above, but there may be a couple of additions or acceptions:
- Purchase order (PO) number: Some companies use PO numbers to track purchases from quotation to final payment
- VAT/TAX number: If you charge VAT or TAX, you must include your client's number so they can submit a claim
Invoice Date & Payment Due Date
An invoice template will usually have two dates:
- The invoice created date
- Payment due date
If the invoice is COD (cash on delivery), then make your invoice and due dates the same.
Description of Goods/Services, Quantities, & Pricing
An invoice description of goods and services provided usually includes three to five columns:
- Unit price
Subtotal, TAX, & Discounts
The subtotal section of an invoice usually includes space for three components:
- Subtotal: The total line items before discounts and taxes
- Discounts: The value of discounts to subtract from the subtotal—always calculated before VAT/TAX
- VAT/TAX: The amount of VAT or TAX calculated on the total after discounts
The discounts and taxes section must also indicate the percentage used for calculation so your client, accountant, and tax auditors can verify your figures.
Total Due Amount
The total due is the final invoice figure that your client must pay. You calculate the invoice total as follows:
Total due = (subtotal - discounts) + VAT/TAX
An invoice's payment terms include your preferred payment methods, payment links, and payment details for bank transfers. These terms might also stipulate agreed milestones—for example, a 50% deposit to start the job and the balance on completion.
If your payment methods incur transaction charges, you can instruct clients to add an extra amount to compensate—for example, "Please include an extra 2.5% for credit card payments."
How to Write an Online Invoice
Here are some tips and best practices to write professional invoices for your clients and get paid on time.
Send a Quotation First
To avoid surprises and disputes, always send a quotation and get your client to sign off before starting a new job or task. You can then reference this quotation on your as a reminder.
Use Clear Descriptions
Use clear descriptions to explain invoice line items, so your client knows exactly what they're paying. For example, "web development" is vague. "Web development for ACME mobile application" is more helpful. Using clear descriptions can also help you get paid faster because clients don't have to ask for additional explanations.
Proof Read Invoices
Avoid embarrassing mistakes by always proofreading your invoices for spelling and calculation errors. Also, double-check your quotations to ensure you're invoicing the correct quantities and amounts.
Keep track of your quotations, invoices, and payments in a spreadsheet, with links to copies, so they're easy to find.
Creating an Online Invoice is Simple With Bonsai
Use Bonsai's free invoice generator to create an unlimited number of professional invoices for your clients. Or, upgrade from Bonsai's free plan to one of our affordable paid plans to take advantage of premium features, like:
- Automate sending invoices
- Create recurring invoices
- Automated payment reminders
- Automated late fee billing for overdue invoices
- Secure online payments, including credit cards, bank transfers, PayPal, and more
- Notifications when clients view and pay invoices
Bonsai is more than an online invoice generator! Create a Bonsai account to take advantage of our free invoice maker and other templates to create, send, and store all of your digital paperwork in one place.
Online Invoice FAQs
How to create a free online invoice?
Bonsai offers free invoice templates for you to customize and send to clients. Choose from 70+ templates for a range of industries, including freelancers, contractors, small businesses, and more.
Do online invoices support payments?
Yes! With Bonsai's paid plans, you can choose from various invoice payment options, including credit card, ACH, PayPal, and more.
How long should I wait before sending an overdue invoice reminder?
Don't be afraid to remind clients about an overdue invoice. We recommend sending a gentle reminder one day before to prevent outstanding payments. Send another reminder the first day the invoice is unpaid, and follow up with a phone call if they don't reply within a couple of days.
How do I calculate overdue invoice fees?
Businesses usually charge overdue invoices per day, based on current interest rates. You calculate unpaid invoices as follows:
- Amount owed x Interest rate = Annual interest
- Annual interest ÷ 365 = Daily interest
- Daily interest x Days late = Interest owed