12 Essential Elements of an Invoice and How to Create One in WooCommerce
An invoice is the financial proof of evidence between the buyer and the online seller of the transactions made against the products purchased.
eCommerce customers generally have to prepay for the products they purchase.
As a WooCommerce owner, do you really need to send an invoice when you already have received the payment?
If yes, how do you create one in WooCommerce?
And what should be included on an invoice?
We will answer all of these questions and outline the 12 essential elements of an invoice for WooCommerce stores in this article.
What is an invoice?
An invoice is a document you send to your customers who are willing to buy your goods and services to collect payments or to the customers who have already made the payments.
For the customers who have already bought the products, the invoice serves as proof of purchases.
Therefore, you can send an invoice to your customer before or after the delivery of the products.
Invoices are also called bills or tabs. It also acts as a legal document in case the invoice has any mistakes or any products were damaged and you need to issue a refund.
Also, in case there’s any false claim from the client’s side the invoice will serve as proof of evidence.
So what are the essential elements of an invoice?
Let’s take a quick look.
- Company logo
- Company information
- Customer’s information
- Invoice number
- Payment method
- Products purchased
- Price and quantity
- Tax information
- Subtotal and Total amount charged
- Terms & conditions
- Personal notes
We will talk about these elements of an invoice in the latter part of the article. But first, let’s find out some of the benefits of invoices.
Why do you need an invoice?
Even though in WooCommerce stores, you don’t need to create invoices in order to get paid, there are still a number of reasons and benefits for which an invoice must be issued.
We have listed some of them below.
Keeping things professional
You might not realize how much of an impact a professional invoice has on your customers. Providing an invoice to a customer demonstrates to them that your business is proficient, even if it’s a small WooCommerce business.
A professionally designed invoice containing all the essential elements will help you stand out from your competition and earn the trust of your customers.
A lot of businesses or your WooCommerce competitors forget to avail the opportunity an invoice offers. An invoice is a part of the customer journey and should not be ignored.
Therefore, you should always send your customers bills/invoices after they buy from your shop. Moreover, this process can be automated in WooCommerce to make the customer experience flawless.
However, you need to be aware of the essential elements of an invoice in order to create a professional one. Let’s explore them one by one.
A WooCommerce invoice is a non-negotiable commercial instrument and can serve as a legal document in the event of a dispute.
An invoice is legal proof of an agreement between you and your customers and can save you from fraudulent lawsuits.
This is the most significant advantage of an invoice. Keeping a legal record of your sales will allow you to track what products were sold to whom and stay organized.
A bill/invoice is an indispensable accounting tool. It is beneficial for both the buyer and the seller to maintain accurate records of their payments. This will also help you learn where you stand financially.
Easy tax filing
As a WooCommerce business owner, it’s important for you to keep track of all sales invoices in order to accurately report income and ensure that proper taxes are paid.
Showcasing your brand
A personalized invoice is a great tool for showcasing your brand and professionalism. Your personalized design and tone of voice should reflect the image you want to portray of your company.
Make sure you include all the important information required on an invoice.
You can learn a lot about your customers’ purchasing habits by looking at invoice data and also can use this data to identify trends, popular products, and peak times for purchasing.
This will help you formulate more successful marketing strategies.
Essential elements of an invoice
This section will discuss the essential elements of an invoice we mentioned earlier. Along with the all-important elements, we’ll discuss a few additional points that can help you better engage your customers.
1. Company logo
Your own customized logo is the foundation of your brand identity. It grabs your customer’s attention and helps make a strong first impression.
Including your logo in your WooCommerce invoice is essential because it makes the document look professional. It also helps in earning the trust of your customers.
Make sure you put a high-quality logo image at the top of your invoice.
2. Company information
Company information is obviously one of the essential elements of an invoice. You should put your company or business information at the top of your invoice.
Generally, it is placed at the top right area of your invoice. Make sure that customers’ billing information and your company information are placed separately so that anyone can identify them easily.
You need to include your legal business name, address, phone number, and email address. According to the country or jurisdiction in which your business operates, you may need to include additional information, such as your tax identification number or VAT number.
You also need to mention the GSTIN number if registered under GST. In fact, it is mandatory to mention this number according to GST law.
3. Customer’s information
You need to put your client/customer’s details such as their name, email, phone number, address, GSTIN, VAT, SSN number, etc., in your invoice.
If you are creating a WooCommerce invoice, then you can get all your customer’s information from your checkout page form entry. It is a good practice to include both the shipping and billing address of your customer in your invoice.
4. Invoice number
An invoice number helps you and your customer keep track and stay organized. You can search and find a purchase history quickly when you allocate a unique identifier to your invoices.
When you are creating a WooCommerce invoice, your PDF invoice plugin will auto-generate the invoice number for you.
However, you can decide the format such as prefix, suffix, custom number format, etc., you want to follow for your invoices.
For example, Invoice #798 or #CustomerH001.
Also, make sure you assign invoice numbers sequentially without any sequence breaks.
This is one of the important components of an invoice, and every invoice must include it. The date in your invoices confirms when the transactions took place.
This will make it easier for you to keep track of when your products or services are sold or provided. The invoice transaction date will also help clear any confusion if there’s an issue with the shipping of the products.
6. Payment method
If you are creating the invoice to collect payments, then you better mention what payment methods you accept. For example, PayPal, Bank transfer, credit card, etc.
If you are creating a WooCommerce invoice where your customer has already made the payment, you can still mention the payment method.
It will help you keep a record of what payment methods your customers are using and is also very important for you to deal with refund claims.
7. Products sold
You need to list the items your customer purchased in your invoice. If you are creating a WooCommerce invoice, then you can include different attributes such as SKU, product image, short description, etc.
SKU means a stock-keeping unit which is a unique identifier only WooCommerce store owners can recognize. They use SKUs to identify their inventory.
Using the SKU number, customers can report any issues they have with their purchases, and you will be able to track down the source of the issue.
Therefore, including SKU or product ID is very important in order to effectively manage any issues relating to returns or refunds.
Along with the product list, you also need to mention the quantity, rate per item, and the subtotal price of the products.
If a customer buys multiple quantities of the same product, it is inconvenient to mention each one individually. It will also take a lot of space in your invoice.
Therefore, mention the rate for the product and quantity ordered and finally mention the total price for that particular product on the same line.
9. Tax information
If any sort of value-added tax or eCommerce sales tax is applied to your business location or your customer’s location you need to ship to, then you need to mention the total tax amount in your invoice.
The amount of the sales tax that applies to online purchases is calculated as a percentage of the total purchase price (not including the cost of shipping), with the exact percentage changing from region to region.
As a WooCommerce store owner, you need to collect the entire amount of tax and remit it to the government.
Like any other form of sales tax, eCommerce sales tax is applied during the payment process, just like it is in a physical store.
Therefore, you need to include the tax amount in the price summary section under the subtotal and calculate the total price, including the tax.
10. Price summary
This section generally includes the following points–
- Total price
You need to mention the total product prices without any discount or tax. Then mention the tax amount separately.
Online discounts are a great way to attract customers. Therefore, you can allow your customers to enter coupon codes when purchasing or offer special discounts or sale prices.
You must include the discounted amount separately in the price summary section. This will also earn customer satisfaction because who doesn’t love discounts?
Finally, you need to mention the total amount customers will have to pay or have already paid.
11. Terms & conditions
You should include some necessary terms and conditions in order to avoid any kind of misunderstanding with your customers.
You can include return policies, tax statements, payment-related terms, etc. The customer is bound to these terms and conditions when you mention them in the invoice, and they can’t deny them later.
If you are creating a WooCommerce invoice, you can either insert a terms & condition page link at the bottom of your invoice or attach a separate document containing all the terms.
12. Personal notes
Personal notes are a great way to engage your customer and earn their trust.
A simple thank you note can do wonders for your brand’s reputation. Your customers will love the personal touch you put in your invoice, and also it will make them feel special.
Besides the WooCommerce invoice requirements we mentioned above, there are some additional elements you can include in your invoice to extend its personalization.
For example, you can include a footer that can contain your WooCommerce website address and emergency contact details in case your customer wants to reach your support service.
In a WooCommerce invoice, you can also include the customer’s special note (If they wrote any on the checkout form).
Additionally, you can also include your signature at the bottom of the invoice.
Types of E-invoice
E-invoice refers to any type of electronic invoice. Although there are numerous types of invoices, both electronic and printed, we will focus on the online invoices.
If you are selling your products globally, then you will need to create commercial invoices. For cross-border sales, commercial invoices provide the information needed to calculate customs duties.
In addition to displaying the amount that is due or paid, it provides information about the buyer, the seller, the mode of dispatch, the destination, the current account, the freight forwarder, payment terms, price, and the currency that is being used for the transaction, and more.
Pro forma invoice
A pro forma invoice is sent to the client before delivering the goods or services. It is an estimated invoice where businesses provide an estimated cost for the work that needs to be completed or the products that need to be delivered.
A pro forma invoice includes details such as price, quantity & quality of the product, payment methods, the terms of payment, supply date, delivery, etc. However, it doesn’t demand payment prior to delivery.
In simple words, you create and submit a pro forma invoice with the product list, price, and delivery details to let the client know how much they need to pay when they receive the product or services.
If you have a SaaS or subscription-based WooCommerce membership website, then you are already familiar with recurring invoices.
When repeating transactions take place, such as subscription fees, recurring invoices are generated and sent to the respective customers at predetermined intervals.
If there’s any damage to the products or errors in your invoice, or you want to provide a discount to a client or issue a refund, you need to create a credit note or credit invoice.
A credit invoice will always have a negative number because of the discount or refund amount.
Standard eCommerce PDF invoice
eCommerce stores generally charge the customers in advance for the products they purchase. As soon as the customers complete the purchase with their payment details, the store needs to send a confirmation email along with the invoice.
eCommerce invoices can also be called electronic bills and come in the form of PDFs. It is very important for both buyers and sellers that the PDF includes all the necessary parts of an invoice we mentioned above.
How to create an invoice in WooCommerce
Now that you have learned about the essential elements of an invoice, you can start creating eCommerce invoices for your WooCommerce store’s customers, right?
Would you manually create invoices for all of your customers individually, one by one?
In the fast-paced eCommerce world, customers expect a quick response and efficient service. Hence, creating invoices manually for your WooCommerce store’s orders would be impractical and time-consuming.
Even though the standard WooCommerce doesn’t come with the tools to create invoices, luckily, there are plenty of plugins that can automate the whole process for you.
In this section, we will show you how you can create a professional electronic bill that includes all the essential elements of an invoice using a PDF invoice plugin called Challan.
Challan PDF invoice plugin
Challan, also known as WooCommerce PDF Invoices and Packing Slips by WebAppick, is the perfect freemium plugin to create professional and personalized invoices.
By the way, a freemium plugin means the plugin has a paid version along with its free one. Paid versions generally have more advanced features, whereas free versions are limited to basic features.
Anyway, the free version of Challan has enough features to create a custom PDF invoice for your WooCommerce store. This plugin auto-generates invoices as soon as your customer completes an order and attaches the invoice to the order confirmation email.
Customers can also download the invoice from the order complete page or from their “My Account” page.
In addition to invoices, this plugin also lets you create packing slips and shipping labels.
We will look into both the free and paid version features of the Challan plugin and also find out how to create an invoice using it in the following sections.
But first, let’s have a look at some of the key features of this plugin.
- Modern and user-friendly interface.
- Allows you to create fully customizable invoices and packing slips.
- Lets automatically attach invoices and even packing lists to your order confirmation email.
- Supports bulk download of WooCommerce PDF invoices, packing slips, and shipping labels.
- Offers fully customizable invoice templates.
- Allows you to add background images to your WooCommerce PDF invoices.
- Enables you to add product and order meta data to your invoices.
- Allows you to add product attributes such as SKU, category, description, etc., in the invoice.
- Supports attaching static files such as terms & conditions documents.
Creating an invoice using the Challan plugin
Our primary goal is to create an invoice that has all the essential elements we mentioned. We will start with the free version.
Jump to your WordPress admin panel and go to Plugins>>Add New. Search the plugin and install it.
As soon as you activate Challan, it will start generating invoices from the very next order. Your customers can download the invoice or credit note from the order completion page or from the order confirmation page.
In addition to that, you can download the invoice manually from the individual order pages. To do so, go to WooCommerce>>Orders and click any of the orders that are under the “processing” state.
As you can see, the plugin created a dedicated panel called “Challan Invoice.” This panel has individual buttons to download the invoice, packing slip, and shipping label for that particular product.
Let’s click on the Invoice button to download and have a look at the invoice Challan created without any customization.
Pretty basic, right? However, you can tweak the setting of Challan and include all the essential elements of an invoice in no time.
Challan free version settings for including the essential elements of an invoice
Find out the dedicated menu for the Challan plugin from the left panel and click on Settings.
You will see that some of the options are already enabled. You can change settings and preview them from the preview panel on the right side.
We’ll only have a quick look at the points that’d help us include the essential elements of an invoice. Scroll down a bit to find the template section.
In the free version of Challan, you can choose from 2 different templates.
The standard and most common paper size is A4. However, you can also set A5 or Letter.
In the Order Settings, you can set invoice number format, prefix, suffix, date format, etc.
Add Order Meta allows you to set additional attributes in your invoice.
In the Product Settings tab, you can limit your product’s title length and choose between SKU and product id.
Additionally, you can insert and display different attributes in your invoice from Add Product Meta and Add Order Item Meta sections.
You can also customize the existing templates by inserting CSS codes.
The Seller & Buyer tab is where you input the most important details of your invoice’s header. You can upload your logo and input your business details as mentioned in our list of most essential elements of an invoice above.
In the footer section, you can insert your personal note, website address, or emergency contact details.
Let’s have a look at our invoice now.
Looks much better right?
You can also bulk download your invoices from the Bulk download tab.
You can filter by specific date range, order status, and payment method.
Challan pro features
The premium version of the Challan plugin starts from just $29 a year and adds a whole bunch of great options for you to further customize your invoice.
As soon as you activate the pro version, you will see significant changes in the Challan Settings menu.
Now you have dedicated settings tabs for invoices, packing slips, and shipping labels.
But first, let’s take a look at what options are added in the general settings tab.
Challan pro lets you select different languages for your WooCommerce invoice.
It also allows you to attach the packing slip along with the WooCommerce invoice in the order confirmation email.
You can back up all your invoices in Dropbox, which is a great feature the pro version provides.
Another pro-only tab is the Static Files tab. This section lets you attach static files along with your invoice in the order confirmation email or other allocated emails.
You can attach a total of 3 files.
In the Bulk Download tab, you can now also filter by your individual customer’s user ID or their email and download invoices for all the orders they have made so far.
Challan pro Invoice settings
Now you can choose from a number of templates.
Besides the previous paper size options, you can set your own custom paper size. You can also display paid stamps in your invoices. You can select one from the existing stamp templates or upload your own stamp.
Additionally, you can upload and display your signature on your WooCommerce invoice. The pro version also lets you upload a background image for the invoices and set the opacity for that image.
The next big changes are in the Product Info section.
You can now display product images, different attributes, and also a short or long product description in the product item table.
Next up, tax and fee settings. This is a premium section you get with the Challan pro. Enable whichever is applicable for you.
Let’s have a look at our final invoice after some tweaks.
If you take a closer look, it has all the essential elements of an invoice we mentioned earlier.
Frequently Asked Questions (FAQs):
A professional invoice should include a company logo, business details, invoice number, issue date, and the list of products purchased with quantity, tax, terms, and total price.
The standard WooCommerce plugin doesn’t have any options or tools to create invoices. However, you can install invoice plugins such as the Challan to auto-generate invoices for your orders.
If you are using WooCommerce invoice plugins such as Challan, you can customize the appearance and information of the invoices from the plugin settings.
From start to end, your customer’s journey in your WooCommerce shop should be flawless and satisfactory.
A custom-designed professional invoice can aid in your customers’ journey at your store, earn their trust and even convert them into loyal returning customers. It will also serve as a legal document to protect your WooCommerce business from errors and fraud.
We hope this article will help you understand the essential elements of an invoice and guide you create your own professional WooCommerce invoice.
You May Also Read
- How To Create A WooCommerce Packing Slip
- Commercial Invoice Template – All You Need To Know in 2022
- Benefits of Using WooCommerce PDF Invoice Plugins for a WooCommerce Store