What is an Invoice?
An invoice is a document issued by the seller at the end of a transaction to collect payment from the buyer. It includes the list of the items purchased along with their prices, quantities, taxes, discounts, delivery charges, etc. An invoice can be considered a demand for payment. Once the payment is made, the invoice is considered to be a bill. It is a legal document and acts as proof of payment in many cases. After the GST rule was implemented, it became mandatory for every business to issue an invoice for supplying goods and/or services.
Invoices can differ according to the company. However, every invoice format must include the following details:
- Name and address of your business
- Name and address of the buyer (individual/company)
- Invoice number
- Invoice date
- Company logo
- Shipping details
- The due date for payment
- Itemized list of products or services purchased with quantities, rates, taxes, and the total amount
- Amount received from the buyer
- Outstanding amount
- Signature of seller
Where are Invoice Formats Used?
Invoice formats are used universally for all businesses. In earlier times, people used to give out handwritten invoices. Even today, sales representatives usually issue handwritten invoices. But with technological advancement, people progressed to computerized invoices. Now, most business owners send e-invoices from their mobile devices.
You can generate invoices using different software such as:
- Invoice format in Excel – Invoice format in Excel is one of the easiest ways to create an invoice. Most people have the software and the knowledge to operate it. However, entries in Excel need to be done manually and hence there is a chance of error. Invoice formats in Excel are a good choice for small businesses
- Invoicing apps – Invoicing software and invoicing apps provide templates that you can customize according to your needs. These apps track your transactions, and hence they can generate accurate invoices without human input. This reduces the scope for errors.
Invoice Format in Excel
You can create an invoice format in Excel using the following steps:
- Open MS Excel
- Go to File 🡪 New 🡪 Blank Workbook
- Click on the View tab, and uncheck Gridlines in the Show option to remove gridlines on the sheet
- Click on Insert 🡪 Picture to insert the company name and logo
- Click on the Header & Footer tab and name the document as “Tax Invoice”
- Enter the company name, address, contact details, and GSTIN on the next line
- Create an “Invoice To” section and enter the customer details
- Enter invoice date, due date, invoice number, etc.
- Create a list of the items for which the invoice is raised, along with their quantities, rates, taxes, discounts, etc.
- Enter the total amount of the items
- Enter payment details, including bank name and PAN card details
- Write Signature on the bottom right of the page and leave some space below to (physically or digitally) sign the document
You can use Excel formulas to input data like date and invoice number automatically. Invoices are important documents that signal the end of a transaction. You are likelier to get paid by generating a professional invoice than a handwritten one. An invoice ensures that you maintain a positive cash flow for your business.