Business

How to Create a Sole Trader Invoice: Clear Guide & Example

Panna Kemenes

19.08.24

Read time 4 minutes

One key aspect of managing your finances as a sole trader is creating invoices. Invoices enable you to get paid for your work. Effective sole trader invoices also make cash flow management easier.

This guide will cover the importance of invoices for sole traders, as well as insider tips and best practices for creating efficient invoices.

What Should be Included on Sole Trader Invoices?

A sole trader invoice is a document you send to your clients to request payment, in exchange for the services or goods you provided them.

Presenting your invoices professionally is crucial for your business’s image and for simplifying your finances.

Some key components of sole trader invoices include:

Your business’s name and contact details
Date of issue
Date the services or goods were provided
Invoice number
Description of the services or goods provided
Total amount due
Details of the client
Terms of payment
Ways the client can pay you

By ensuring to include the relevant information, you can prevent overdue invoices and prevent delays in receiving payment.

How to Invoice as a Sole Trader

Creating your first invoice can be intimidating, but it’s actually a straightforward process.

Here’s a step-by-step guide on how to invoice as a sole trader:

Choose an invoice template or software. Start by selecting an invoicing tool or template that suits your business. Software such as QuickBooks, FreshBooks and Wave offer features that help you to create, send and track invoices efficiently. With a Wise Business account, your transactions can be synced with Wave, FreshBooks, QuickBooks, or Xero easily, saving you time on manual entry. You can also use free downloadable templates if you prefer a simpler approach.

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Add your business details. Include your business name, address and contact information at the top of the invoice.
Include the invoice number and date. Give your invoice a number and add the date the invoice is issued. Giving your invoice a number makes it easy to keep track of your cash flow.
Describe the services or goods provided. Write a detailed description of what you are billing for, whether it’s a product or service.
Include the total amount due. Add up the costs of the services or products provided and clearly state the total amount your client needs to pay you.
Use clear payment terms. Clearly state when the payment is due and your preferred payment methods. This could include options such as bank transfer, credit card or online payment platforms.
Review and send. Double-check all the details to ensure accuracy and then send the invoice to your client.

Tips for Creating a Professional Sole Trader Invoice

A professional-looking invoice not only helps you get paid faster but also presents your business in the best light. Here are some sole trader invoicing tips to make your invoices stand out:

Customize your sole trader invoices with your branding. Your invoices should reflect your business and brand. That means you should include your logo, font and colors on every invoice you send, to leave an impression on your clients.
Double-check for accuracy. Double-checking your invoice for accuracy is crucial. Make sure the invoice number, client details and total amount due are correct. Any mistakes can cause delays in payment and make you look unprofessional.

Sole Trader Invoice Example

This is an example of your sole trader invoice should be laid out in order to maintain a professional appearance. You can download a template for this invoice for free or use the invoice generator from Wise and simply fill it out with your business details.

invoice example

Invoicing Best Practices for Sole Traders

Efficient invoicing isn’t just about creating the invoice. It’s also about how you manage and follow up on them.

Here are some best practices to keep in mind:
Invoice Promptly: The sooner you send an invoice, the sooner you can get paid. Don’t wait too long after completing a job to send your invoice. Set Clear Payment Terms: Make sure your payment terms are clear and easy to understand. For instance, if you expect payment within 30 days, make this Net 30 payment term clear on your invoice. You can also offer incentives for early payment or add late fees for overdue payments. Follow Up on Unpaid Invoices: If a payment is overdue, don’t be afraid to follow up. Send a reminder after the due date and continue to follow up if needed. Keep Track of Sent Invoices and Payments Received: It’s important to have a system in place to track your invoices and payments. This could be as simple as a spreadsheet or as detailed as using invoicing software that automatically tracks payments. Keeping good records helps you manage your cash flow and ensures you know which invoices have been paid and which are outstanding.

Here are some best practices to keep in mind:

Invoice Promptly: The sooner you send an invoice, the sooner you can get paid. Don’t wait too long after completing a job to send your invoice.

Set Clear Payment Terms: Make sure your payment terms are clear and easy to understand. For instance, if you expect payment within 30 days, make this Net 30 payment term clear on your invoice. You can also offer incentives for early payment or add late fees for overdue payments.

Follow Up on Unpaid Invoices: If a payment is overdue, don’t be afraid to follow up. Send a reminder after the due date and continue to follow up if needed.

Keep Track of Sent Invoices and Payments Received: It’s important to have a system in place to track your invoices and payments. This could be as simple as a spreadsheet or as detailed as using invoicing software that automatically tracks payments. Keeping good records helps you manage your cash flow and ensures you know which invoices have been paid and which are outstanding.

💡 Another thing to bear in mind is how to invoice overseas customers. A Wise Business account makes it easy to receive invoice payments like a local. You can open a Wise Business account online, set up account details, and add them to your invoice. This makes it easy for your customers to pay you - which can help you get paid faster.

Find out more about Wise Business

Tools and Resources

There are many tools and resources out there to help you when it comes to sole trader invoices.

QuickBooks, FreshBooks and Wave are some great tools you can use to help smooth out the invoicing process.

If you prefer a simpler approach, you can also download free invoice templates for sole traders or use the free online invoice generator or free sole trader invoice template from Wise that you can customize for your business needs.

Make it a habit to invoice promptly, follow up on unpaid invoices and keep accurate records of all transactions. This will help you maintain steady cash flow and build strong relationships with your clients.

Efficient invoicing is crucial for the success of your sole trader business. It not only helps you get paid on time but also makes your business look professional. By following the tips and best practices discussed in this article, you can create professional invoices that help you manage your cash flow effectively.

💡 For all you need to know about invoices, don't forget to read and bookmark the ultimate guide to invoicing from Wise!

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