- Invoice ID
Whenever you generate a new invoice, a unique number is allocated to that invoice. This number is called the Invoice ID. It is recommended that you give a sequential invoice ID to all your customers’ invoices ito track them more effectively.
- Sales Tax
It is important to include the price of the goods and services provided, along with the sales tax payable in the invoice. This includes Harmonized Sale Tax (HST), Goods and Services Tax (GST), and Provincial Sales Tax (PST). If you want to learn more about sales tax and its importance, read our article on the subject.
In case you are charging GST/HST, it is mandatory to follow CRA’s requirements for the details which must be included in your invoices.
- Itemized List of Goods and Services
To provide your customers with clear information about the products and services they are purchasing, the best practice is to break down your goods/services into an itemized list in your invoice. You should state the quantity and cost of each item individually.
- Total Amount Due
After stating the individual costs of each item, you have to sum them up and state the total amount due at the end of the invoice. This is the amount that you will record as a receivable in your books.
- Business Information/Client Information
It is important to start off the invoice with the necessary information about your business and your customer’s business. This includes information like name, logo, physical address, email address, contact information etc.
- Due Date (Net D)
The Net D is one of the most significant payment terms included in the invoice. This indicates the number of days that are given to the customer to pay the due amount, starting from the day the customer receives the invoice. Typically Net 30 is used, meaning that the customer must pay the due amount within 30 days of receiving the invoice.
- Payment Terms
This section of the electronic invoice includes all of the agreed-upon guidelines for paying the amount due on the invoice. For example, it could include early payment reductions, late fees, payment methods, etc.
Use This Step-By-Step Electronic Invoicing Process to Create Efficiency in Your Business
Now that you know how to use cloud accounting software to generate e-invoices, consider taking advantage of our discounted pricing for Quickbooks to implement this accounting software, or Xero, in your business. Once e-invoicing is part of your small business accounting workflow, you’ll realize significant benefits and reduce the time and money spent on back-office tasks which do not contribute to your bottom line.
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