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What is an invoice and how does invoicing work?

Everything you need to know about invoicing for your business

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An invoice is a dated document recording a transaction between a seller and a buyer. Types of invoices may include a paper receipt, a bill of sale, debit note, sales invoice, or online electronic record.

In the event where goods or services are purchased on credit, the invoice should specify the terms of the deal and provide information on the available method of payment.

​You are required by law to give your customer an invoice (or bill) if both you and the customer are VAT registered (i.e. for a business to business transaction) and you sell a customer a product or a service.

Invoicing is essential for small businesses. They are the business documents that enable companies to be paid for their services. A popular way to get started with invoices are to use invoice templates.

What is an invoice used for?

Invoices serve an important purpose for both the business sending it and the client receiving it. For small businesses, an invoice helps expedite the payment process by giving clients a notification of the payment that is due. For clients, invoices provide an organized record of an expense with itemized details, and can help with record keeping.nvoices are essentially used as a source document for business accounting and are extremely helpful for recording all the sales transactions a business makes with its clients.

Summary of what invoices are used for:
    • To request payments within a set timeframe from your customers/clients
    • To effectively track inventory
    • To record business revenue for tax returns and to stay on top of your sales
    • To help forecast future sales by using the data


How do you invoice clients?

Create a professional invoice using an online invoice template, setting reasonable payment terms to reflect your current cashflow position and when you require to be paid. One of the simplest ways to invoice your client is to attach the invoice to an email, especially if this has been the general method of communication between parties.

It can help to agree payment terms with the client before the work is carried out so this is confirmed in advance. If you don’t receive payment from a client by the invoice due date, you’ll have to reach out directly to the client about the overdue payment and politely remind them to make sure the payment is processed. If you continue to experience problems with getting your invoices paid on time, then our invoice finance service might be the best solution for your business.


What to include on an invoice

Make sure your invoice includes all the details your clients will need to pay you, including your business name, the invoice due date and the total amount due.​ You should send your client an invoice as soon as you’ve completed work on a project, this way the details of the work will be front of mind and this is a good way to make sure you receive payment as quickly as possible.

An invoice must state it is an invoice on the face of the bill. It typically has a unique identifier called the invoice number that is useful for internal and external reference. An invoice should also include contact information for the seller in case there is an problem relating to the payment.

Payment terms should be confirmed on the invoice, as well as the information relating to any discounts, early payment details or finance charges assessed for late payments. It should also show the unit cost of an item, total units purchased, handling, shipping, and associated tax charges, as well as clearly stating the total amount due.

In summary:
    • Your client's contact information
    • Your business contact information
    • An invoice number or unique reference
    • Payment terms
    • List of services
    • The total amount due

  • Are you struggling to get your invoices paid on time? Have you thought about Invoice Finance as a cashflow solution for your business?

    Invoice finance allows you to release cash quickly from your unpaid invoices.

    As your lender, we can release up to 90% of your invoices within 24 hours. On payment of the invoice from your customers, we will then release the final amount minus any fees and charges. There are different types of invoice financing options available to businesses depending on the situation and the level of control they require in collecting unpaid invoices.

    We are an invoice financing company who offer a solution whereby payments are collected on your behalf managed by our team of expert credit controllers so you can focus on running your business. Our Confidential Invoice Discounting solution is offered to businesses who want to maintain their own credit control processes, therefore this remains strictly confidential so your customers are unaware of our involvement.

    The benefits of invoice finance companies such as Hitachi Capital
      • Boost your cashflow without having to wait up to 120 days for your customers to pay you
      • An invoice finance company with a revolutionary digital onboarding process, giving you quicker access to funds and the ability to take on new business remotely during this lockdown period
      • Release up to 90% of the invoice straight away, and the final 10% when the invoice is settled
      • No need to chase your invoices, we can do it for you
      • 6 month trial period followed by a rolling contract

Get a quote online or call 0808 250 0859

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We have revolutionised invoice financing with our digital onboarding process

We are an award winning invoice finance company

Best Invoice Finance Service 2021

Highly Commended Factoring Provider 2021

Best Invoice Factoring Provider 2020

Please note that costs are an estimate only and are based on the entered values. Your final quote may change once a Business Development Manager has assessed your business in more detail.

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Please note that costs are an estimate only and are based on the entered values. Your final quote may change once a Business Development Manager has assessed your business in more detail.

Get a quote now Check Eligibility

Why choose Hitachi Capital as your invoice finance company?

      • A 6 month trial period so you can be sure the product is right for you
      • Followed by a 6 month rolling contract – we don’t tie our clients in for long periods
      • A one fee solution with no hidden fees
      • Award-winning client service by our team of expert Client Managers
      • Our Relationship Management team are in the field to visit you in person
      • We are part of Hitachi Capital (UK) PLC, a company that is going from strength to strength – we’re here for the long term.

Smarter, Faster and Simpler Cashflow Finance with Hitachi Capital

Smarter, Faster and Simpler Cashflow Finance with Hitachi Capital

Smarter, Faster and Simpler Cashflow Finance with Hitachi Capital

Find out how we are revolutionising the way UK SME's access cashflow finance.

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