If you're providing goods or services in exchange for payment as a one-man team, you are running a sole proprietorship business. As a sole trader, you'll issue invoices to companies to receive payments for your services.
As a sole trader, it is important to look as professional as possible as it can impress your clients and make them comfortable giving you work. This includes everything from business cards, letterhead, and invoices.
What exactly is an invoice? It's where sole traders define the goods delivered/services performed, the amount charged, and the payment terms for the clients or customers. Creating a new invoice may seem like a pain... but we'll walk you through everything you need to know in order to easily craft a sole trader invoice.
You'll discover the quickest way you can create invoices and the details for what should be included in the commercial document.
Note: If you are a sole proprietor and you want to try a simple way to edit/send invoice information, try Bonsai. Our invoicing software makes it incredibly easy for you to send professional invoices and get paid. Our invoice templates have all the necessary details like contact information, address, due date, description, and more. Save time with Bonsai. Claim your 7-day free trial today to use our invoice template.
What Is The Easiest Way A Sole Proprietor Can Create An Invoice?
As a sole business owner, you do not need to contact the tax authorities in advance in order to be able to issue a private invoice. Unlike corporations, sole proprietors have the freedom of issuing invoices without restrictions or formal requirements.
Although there are practically no requirements for how an invoice should look or what information it should have, the presentation of your invoice as well as best practices is important to appear credible and professional. The easiest way you can accomplish this is by using invoice templates.
There are a ton of sole trader invoicing software on the market, but we'll review the one we know best--our own. Bonsai is an all-in-one freelancer software with "ready-to-edit" professional-looking templates.
Our templates make it a breeze to send professional invoices.
Whether you need an invoice template for graphic designer or social media marketer, we got you covered. We'll include all the vital details in the invoice you can quickly edit and make it look more appealing. On top of that, you'll get access to all our other templates for contracts or sole proprietor proposals.
Try a 7-day test run of our free invoice templates today. You'll see how our software can make life easier to create and send unlimited invoices.
However, if you opt to make your own and not use an invoice template, here are some details for what to include in the invoice.
What Information Should You Include In Professional Invoices
It's a great idea to hash through all the details of the invoice before you perform your service. Before you send your first invoice to a customer, we'll review what should be included.
You can generate an invoice on Microsoft Word or Google Sheets with this info:
Note: If you want to save time and have a sole trader invoicing software take care of all of this for you, try Bonsai. Our all-in-one freelancer software can help you send out nice invoices to get paid without you having to constantly create invoices from scratch. Claim your 7-day free trial and try an invoice template today.
First, you'll want to write down the details of your business on the invoice. This would include your name or the business name, address, invoice number, contact, and payment information.
Your company name or full name should stand out at the top of your invoice in an easy-to-read font. We recommend the front of your name to be a little bit bigger and bold compared to all the other text on the invoice in order to stick out. To add an additional touch of professionalism to your invoice, consider creating and including a business logo.
An accurate billing address helps invoices and bills reach the company's correct location. In other words, it is an important piece of identifying information that a credit card issuer or other financial institution – has on your file. This information would help protect you from credit card fraud or identity theft.
You'll also want to include an address where any legal documents can be delivered to you. If your shipping address is different than your billing one, be sure to clearly state that.
If a consumer or client has a problem with an invoice, they'll need to quickly get in touch with you to work it out. That's why it is important to have contact information placed on the sole trader invoice. Place your main phone number that can be answered on a timely basis in bold and your best email.
This will make it much easier for the billing or accounting department to connect with you if any problems arise.
A unique invoice number is vital to say organized. This unique identifier will allow you to track and manage your invoices for customers so you'll know which ones got paid and unpaid. The invoice number would also connect the client with the transaction to help with the bookkeeping process.
The invoice date is essentially a time-stamped time and date on which the goods have been billed to the client and the transaction officially recorded. Along wih the date of the invoice, important information regarding the payment and the due date of the bill will be included.
You can include a "due upon receipt" where your customer would have to pay the invoice as soon as they receive it.
There are all sorts of ways an invoice could be paid. For instance, you can include payments to be received in cash, credit card, bank transfers, checks, etc.
If you require payment before releasing goods or performing services, you might consider adding "payment due upon receipt". If you want to get paid faster, bank transfers are always a great way to go.
Bank account transfers are a common way to send payments. If you decide to use a bank transfer as your method of choice, then include the following details in the invoice:
Optional: Add Payment Terms And Referral Incentives
At the bottom of the invoice, you can include instructions for payment terms. Sometimes you can include a short phrase, "Terms: Net 30" which means you expect to be paid in full in the next 30 days. In this example, if you set the payment guidelines to be 30 days and the client is late, follow up with an email.
It is not uncommon for a sole proprietor or sole trader to charge 1.5 percent interest per month on outstanding bills as a late fee. Just be sure you work out clear guidelines with your clients. By charging a late fee, you'll give your customers a nice incentive to send money on time.
You could also include a small note to attract new clients. After all, finding more work or new business is one of the hardest tasks as a self-employed business owner. When invoicing clients, include a small note to state you'll give a discount on your services or a referral kickback if they introduce or mention you to a new customer.