How to Create an Invoice for the First Time: A Complete Beginner's Guide

You've just landed your first freelance client, made your first sale, or finished your first project as a self-employed professional. Now it's time to get paid — and that means sending an invoice. If you've never created one before, this guide will walk you through every step, from what an invoice actually is to what it should contain, how to number it, and how to send it so you get paid promptly.

This guide is written with UK requirements in mind but covers fundamentals that apply globally. Whether you're a freelance designer in London, a consultant in Manchester, or a developer working remotely, the principles are the same.

What Is an Invoice, Exactly?

An invoice is a formal document you send to a client or customer requesting payment for goods you've sold or services you've provided. It's not a receipt (which confirms payment has been made) and it's not a quote (which estimates what something will cost). An invoice is specifically a request for payment after the work has been done or the goods have been delivered.

Legally, an invoice serves several purposes: it creates a record of the transaction for both you and your client, it provides the information HMRC needs to verify your income, and if you're VAT-registered, it's the document your client uses to reclaim the VAT they've paid you.

In short: no invoice, no paper trail. No paper trail, potential problems with tax, disputes, and getting paid.

Step 1: Gather Your Business Information

Before you create your invoice, make sure you have the following information ready. You'll need it every time you invoice, so it's worth setting this up once and saving it as a template.

Your Details (the Seller)

• Your full name or business name. If you're a sole trader, this is usually your legal name. If you trade under a different name, include both (e.g., “Jane Smith trading as Smith Design Studio”).
• Your address. This can be your home address or registered business address. In the UK, if you're a limited company, you must use your registered office address.
• Your contact details. Email address and phone number, so the client can reach you if they have questions about the invoice.
• Your VAT number (if you're VAT-registered). If you're not VAT-registered, you don't need this and should not include a VAT number.
• Your company registration number (if you're a limited company). This is required by the Companies Act 2006.

Your Client's Details (the Buyer)

• Company name (or the individual's name if they're not a company)
• Address
• Contact person — the name of the person who commissioned the work or who handles payments. This is important because sending the invoice to the right person dramatically increases the chance of prompt payment.

If you're not sure of the client's full legal name or address, ask before you invoice. It's better to get this right first time than to have to re-issue the invoice.

Step 2: Set Up Your Invoice Numbering System

Every invoice must have a unique identification number. This is not optional — HMRC requires it, and your client's accounts department will expect it. Sequential numbering is the standard approach: your first invoice is number 1, the next is number 2, and so on.

However, you don't have to start at 1. Many new freelancers start at 001 or even 1001 because they don't want clients to know that this is literally their first invoice. This is perfectly fine — HMRC doesn't care what number you start at, only that the sequence is consistent and unique.

Here are some common numbering formats:

• Simple: INV-001, INV-002, INV-003
• Year-based: 2026-001, 2026-002 (resets each calendar year)
• Prefix-based: JS-001, JS-002 (using your initials)

Pick one format and stick with it. Never reuse a number, never skip numbers, and keep a simple log of which numbers you've used. A spreadsheet works fine for this when you're starting out.

Step 3: Add the Invoice Date and Due Date

Your invoice needs two dates:

• Invoice date: The date you're issuing the invoice. This is usually today's date. Don't backdate invoices — the invoice date should be the date you actually send it.
• Due date (or payment terms): When you expect payment. This is one of the most important fields on your invoice. Common payment terms include:

As a new freelancer or small business owner, start with Net 14 or even Due on Receipt. There's no rule that says you have to give clients 30 days to pay. Shorter terms mean faster cash flow, which is critical when you're starting out.

Always express the due date as a specific calendar date (e.g., “Payment Due: 25 February 2026”) in addition to the terms. This removes any ambiguity about when the clock started.

Step 4: Describe What You're Charging For

This is the main body of your invoice — the line items. Each line should describe a specific piece of work or product with enough detail that the client can immediately see what they're paying for.

A good line item includes:

• Description: What the work or product is, in specific terms
• Quantity: How many units, hours, or items
• Unit price: The price per unit, hour, or item
• Line total: Quantity multiplied by unit price

Bad example: “Design work — £1,500”

Good example:

• Logo design (3 concepts, 2 revision rounds) — 1 x £800 = £800
• Business card design (double-sided) — 1 x £250 = £250
• Social media templates (5 templates) — 5 x £90 = £450

The more specific your descriptions, the fewer questions the client will have and the faster they'll approve payment. It also protects you in case of a dispute — a detailed breakdown is much harder to argue against than a single vague line.

Step 5: Handle Tax Correctly

Tax on invoices is simpler than most people think, but you need to get it right from your very first invoice.

If You Are Not VAT-Registered

If your annual taxable turnover is below the VAT registration threshold (£90,000 in 2026), you are not required to register for VAT and you should not charge VAT on your invoices. Your invoice should show the total amount without any VAT line. You may optionally include a note saying “Not VAT-registered” for clarity.

If You Are VAT-Registered

You must charge VAT on your invoices (usually at 20%, though some goods and services attract reduced or zero rates). Your invoice must show:

• Your VAT registration number
• The subtotal (before VAT)
• The VAT amount
• The total (including VAT)
• The VAT rate applied to each line item

Income Tax for Self-Employed

Income tax is not shown on your invoices. As a self-employed person in the UK, you pay income tax through Self Assessment. Your invoices are the records HMRC uses to verify your income, so keeping them accurate and complete is essential. You must keep copies of all invoices for at least 5 years (6 years if VAT-registered).

Step 6: Add Your Payment Details

This is the step many first-time invoicers forget, and it's the one that directly delays payment. You need to tell the client exactly how to pay you. Include a clear “Payment Details” section with:

• Bank name (e.g., Monzo, Starling, Barclays, HSBC)
• Account name (the name on the bank account)
• Sort code (six digits, e.g., 04-00-04)
• Account number (eight digits)
• Payment reference — ask the client to use your invoice number as the payment reference so you can easily match payments to invoices in your bank statement

If you accept international payments, also include your IBAN and SWIFT/BIC code. If you accept PayPal or card payments, include those details too. The more payment options you offer, the easier it is for the client to pay you promptly.

Step 7: Add the Finishing Touches

With all the essential information in place, consider adding these optional but recommended elements:

• Your logo: If you have one, adding it to the top of your invoice makes it look more professional and helps with brand recognition.
• A thank-you note: A brief line like “Thank you for your business” adds a personal touch without being unprofessional.
• Late payment terms: A line stating “Late payments are subject to statutory interest at 8% above the Bank of England base rate under the Late Payment of Commercial Debts Act 1998” acts as a deterrent and protects your rights.
• Purchase order number: If the client gave you a PO number when commissioning the work, include it on the invoice. Many companies cannot process an invoice without a matching PO number.

Step 8: Choose a Format and Create the Invoice

Your invoice should be a PDF file. Not a Word document, not an Excel spreadsheet, not an email with the amount in the body. PDFs are the standard because they can't be accidentally edited, they look the same on every device, and they're easy to file and forward.

You have several options for creating your invoice:

• Invoice generator tool: The fastest option. Tools like InvoiceForge let you fill in your details and generate a professional PDF invoice in under a minute. This is ideal if you want something polished without spending time on formatting.
• Spreadsheet template: You can create an invoice in Google Sheets or Excel and export it as a PDF. This gives you full control but requires more manual formatting.
• Word processor: Microsoft Word or Google Docs with a table layout. Workable but time-consuming and often results in inconsistent formatting.
• Accounting software: If you already use Xero, QuickBooks, or FreeAgent, these tools have built-in invoicing. This is the best long-term option once you have regular clients and need to track payments systematically.

For your first invoice, an invoice generator is the easiest and fastest route. You can always switch to accounting software later as your business grows.

Step 9: Send the Invoice

How you send your invoice matters almost as much as what's on it. Follow these best practices:

• Send it by email as a PDF attachment. Do not embed the invoice in the body of the email — attach it as a file.
• Write a brief, professional email to accompany it. Something like: “Hi [Name], please find attached invoice #INV-001 for [description of work]. The total is £[amount] and payment is due by [date]. My bank details are on the invoice. Please let me know if you have any questions. Thanks, [Your Name].”
• Send it to the right person. If your main contact isn't the person who processes payments, ask who should receive the invoice. Sending it to the wrong person is one of the most common causes of payment delays.
• Send it promptly. Invoice the same day you complete the work. Every day you delay is a day added to your payment timeline.
• Name the file sensibly. Use a format like “INV-001-YourName-ClientName.pdf” so it's easy for the client to find later.

Step 10: Follow Up and Track Payment

Sending the invoice is not the end of the process. You need to track whether it gets paid and follow up if it doesn't. Here's a simple follow-up schedule:

1. On the due date: If payment hasn't arrived, send a brief, friendly reminder. “Hi [Name], just a quick note that invoice #INV-001 is due today. If you've already sent payment, please disregard this.”
2. 7 days after the due date: A slightly firmer follow-up. “I noticed the payment for invoice #INV-001 hasn't come through yet. Could you let me know when I can expect it?”
3. 14 days after the due date: Reference your payment terms and mention your right to charge statutory interest under the Late Payment of Commercial Debts Act 1998.
4. 30 days after the due date: Consider a formal letter before action. At this point, you may want to read our guide on how to chase unpaid invoices.

Keep a simple record of your invoices — even a spreadsheet with columns for invoice number, client, amount, date sent, due date, and date paid is enough when you're starting out. This helps you spot overdue payments immediately and gives you a clear picture of your cash flow.

A Complete Example: Your First Invoice

Here is what a complete first invoice looks like, putting all the steps together:

Common First-Time Mistakes to Avoid

Now that you know what to include, here are the mistakes first-time invoicers make most often:

• Sending the invoice as a Word document instead of a PDF. Word files can be accidentally edited and look different on different computers. Always export to PDF.
• Forgetting the payment details. Your client can't pay you if they don't know where to send the money. Always include bank details on the invoice itself.
• Using vague descriptions. “Design work” tells the client nothing. Be specific about what you delivered.
• Not including a due date. Without one, the client has no deadline and you have no standing to chase late payment.
• Waiting too long to invoice. Send the invoice the day you finish the work. Delaying it just delays your payment.
• Not keeping a copy. Always save a copy of every invoice you send. You'll need them for your tax return and potentially for HMRC.
• Charging VAT when not registered. If you're not VAT-registered, do not include a VAT line on your invoice. This is a serious compliance issue.

Legal Requirements for UK Invoices

To summarise the legal requirements for invoices in the UK:

• Sole traders: Must include your name (and trading name if different), address, and a unique invoice number. If VAT-registered, your VAT number must also appear.
• Limited companies: Must include company name, registered office address, company registration number, and place of registration (e.g., “Registered in England and Wales”). If VAT-registered, include your VAT number.
• Partnerships: Must include the partnership name, business address, and the names of all partners (or where a list of partners can be inspected).
• Record keeping: You must keep copies of all invoices for at least 5 years (6 years if VAT-registered). Under Making Tax Digital, these records may need to be stored digitally.

You're Ready to Send Your First Invoice

Creating your first invoice might feel daunting, but it really comes down to including the right information in a clear, professional format. Get your details right, describe what you're charging for, set clear payment terms, include your bank details, and send it promptly as a PDF. That's it.

Once you've created your first invoice, the second one takes half the time. By your tenth, it'll be second nature. The important thing is to start with good habits — proper numbering, clear descriptions, and prompt invoicing — so you build a professional reputation from day one.