Imagine you’re sitting at a restaurant and you receive your bill. The food was delicious, but the bill shows a charge much higher than the price listed on the menu. You look it over and see no details on the bill—only the amount you owe. Any rational person would have questions and request an itemized bill before paying.
An itemized invoice is essentially the same thing. They are invoices that include detailed information on each product or service rendered by a business or contractor. They can be tedious to produce, which is why there are a plethora of invoice templates floating around online. If you do a search, you will see free invoice templates for handymen, photographers, writers, and many other professions.
The trick is to find the right invoice for you and your business. If you work in construction, you certainly don’t want a real estate photography invoice template. Each industry has unique needs that must be reflected in its invoices.
What Do You Use an Itemized Invoice For?
An itemization is an approach to invoicing that can make your billing process run smoothly and minimize client disputes or questions about charges. It will appear as a list on your invoice, separately detailing the quantity and price of labor hours for a service or product. It totals these individual figures and factors in taxes and discounts that are then presented to your client, along with a comprehensive explanation of the charges.
This can look different from template to template, depending on your business. For some industries or jobs, it makes more sense to list services and goods rendered at a flat rate. Others charge for services on an hourly basis. The type of format you choose is dependent on you and your business because either type of invoice can provide a clear and concise explanation of charges to clients.
By having a detailed list with exact costs, clients and servicers have a comprehensive understanding of what they’re charging or paying for. Both parties know exactly what was provided and the cost. Itemized invoices eliminate any confusion or demand for price adjustments, streamlining the payment process.
How Do You Make an Itemized Invoice?
Not every online template for your industry will suit your needs. This is why we recommend working with a reputable invoicing software platform, such as Invoice Ninja. They are experts in invoicing and can help you craft the ideal invoice for your services.
When you get started making an invoice, create sections that cover all of the information you and your clients will need. This includes:
- Invoice creation date, due date, and file ID (your invoice number)
- Contact information for both your company and client
- An itemized list of services and products. Include the quantity, taxes, and fees if applicable, as well as the cost per piece or per hour for labor–this can take as many or as few lines as your project requires
- Payment options and instructions
The right invoice template will take the information you input and calculate the totals for you. You can opt to include information for clients that can help them with any aspect of the payment process that may be confusing.
Many small business owners ask if they can legally charge interest on overdue invoices. In short, you absolutely can. To avoid confused and frustrated clients, ensure they have signed a contract agreeing to these terms in advance. You can include a friendly reminder about this policy on your invoice as well. Professional invoices can include tips and recommendations, such as information on payment plans or adjusted due dates for payments if clients pay digitally or by mail.
While you could always list the above items and terms in a Word document, it doesn’t look professional and is a tedious, repetitive process. Invoice templates make breaking down costs easier and result in timely payments. You want your invoice template to look professional, reflect your business, and offer clear information and instructions.
Invoice Ninja provides thousands of businesses, freelancers, and other independent contractors with the invoices they need. Don’t leave your clients guessing–Invoice Ninja has your back!