What is WooCommerce Invoice & Why Invoicing is Important for Online  Store

An WooCommerce invoice, also known as a bill or tab, is a document that a seller provides to a buyer after a sale. It outlines what products or services were sold, how much of each was provided, and the agreed-upon prices.

Invoices usually include payment terms, which tell the buyer how much they have to pay the invoice to your WooCommerce store.

Woocommerce invoicing is crucial for your online store because it helps maintain transparency, track payments, and ensure legal compliance. In fact, invoices also assist with bookkeeping, tax reporting, and handling returns or refunds efficiently in your Woocommerce store.

In this guide, we’ll explore everything about Woocommerce invoices and how they improve store management, legal compliance, and customer relationships.

What is a WooCommerce invoice?

A WooCommerce invoice is a formal document that details the financial transaction for the products or services provided by your WooCommerce store. It often serves as a commercial invoice that outlines the ordered product list and indicates the total amount due, even VAT/tax. 

Additionally, it may include a waybill for shipping purposes. So, this sales invoice is also referred to as a bill of lading or tab in WooCommerce. 

How does the invoice system work in woocommerce store?

When a customer purchases something from a Woocommerce store, the seller invoices the order with what is bought and how much it costs. Then, the buyer receives the invoice as a bill of the order.

However, besides the product list and due amount, there’re also several essential elements inclues in a Woocommerce invoice. 

What are the key elements to include in a WooCommerce invoice?

• Seller’s and Buyer’s Contact Information
• Shipping Information
• Billing information
• Invoice number
• List of Goods or Services
• Shipping Charges
• Total Amount Due
• Discounts or tax amounts (GST or VAT);
• Payment details
• Debit or credit terms

Again, just including valid information in the woocommerce invoice isn’t enough. You should always follow the typical format of an invoice and slice the invoice into a header, body, & footer. 

In the invoice header section, the seller & buyer pieces of information are included. The product details are placed with detailed pricing in the body section. In the invoice footer, payment methods, and refund policy are placed for further queries.

This structured invoice format is a must to make it visually clear and easily understandable for both the marketing manager and your customers as well.

Now, let’s make it more clear with an example of a professional Woocommerce invoice:

What are the different types of WooCommerce invoices?

WooCommerce supports various types of invoices to cater to different business needs and make the invoice processing more efficient. Basically, invoices are mainly PO (purchased order) invoices and non-PO invoices.

However, WooCommerce invoices can be classified based on how the invoice is processed, including:

• Pro forma invoice:

A pro forma invoice is a document in foreign trade that outlines a seller’s commitment to supply specific goods to the buyer at agreed prices. However, it’s not a formal invoice, so the seller doesn’t record it as an account receivable, and the buyer doesn’t treat it as an account payable.

Example: DHL, which provides pro forma invoices for estimating shipping costs in international trade.

• Commercial invoice:

A commercial invoice is an official invoice that is mainly used for international shipments and includes shipping transactions and customs. Though commercial invoices are typically not required for shipments within EU countries, they are necessary for shipments between EU countries and non-EU countries.

Example: FedEx, which issues commercial invoices for packages crossing borders.

• Credit memo:

A credit memo document is typically issued to lower the amount owed by the buyer for refunds or any adjustments.

Example: Amazon uses credit memos for processing product returns and issuing refunds.

• Debit memo:

When a company fails to pay or underpays an invoice, it’s standard practice to issue a debit memo to account for the remaining balance and any applicable late fees. Essentially, debit memos function just like invoices.

Example: Airbnb, which issues debit memos for additional fees added to bookings.

• Self-billing invoice:

In self-billing invoices, the buyer creates the invoice on behalf of the seller according to the consumption levels. If there is tax on the sale, e.g., VAT or GST, then the buyer and seller may need to adjust their tax accounts in accordance with tax legislation.

Example: Tesco, which uses self-billing for its suppliers.

• Collective invoicing:

Collective invoicing, or monthly invoicing, combines multiple transactions into one invoice once a month, which helps reduce paperwork and streamline payments. This invoice type is mostly popular in Japan because businesses there often place many small orders. 

Example: Microsoft bundles services like Office 365 into a single invoice.

• Continuation or recurring invoicing:

Continuation or recurring invoicing is commonly used for ongoing services or subscriptions, like tool rentals. A final invoice, called an off-rent invoice, is sent when the equipment is returned. This can also apply to advance billing or invoicing on a specific day each month.

Example: Netflix, which sends recurring invoices for its monthly subscription service.

• Electronic invoicing:

Electronic invoicing is a fully digital invoice that speeds up transactions and makes the process more efficient without needing any paper.

This e-invoicing covers a range of formats, including EDI (Electronic Data Interchange), XML invoice messages, and other formats like PDF (Acrobat). 

Example: Most of the digital online companies, including Apple.

Why are WooCommerce invoices important for online stores?

The main purpose of a WooCommerce invoice is to provide a clear and detailed record of a transaction between you and your customers. But WooCommerce invoices are more than just transaction records. These online invoices play a key role in enhancing seller-buyer communication, proper cash collection, and building customer trust.

Here are some reasons why Woocommerce invoices are crucial for your online store:

Bookkeeping

Invoices help you keep your finances organized with legal records. This makes managing your bookkeeping a breeze and ensures you always know where you stand financially.

Fulfill legal requirement

Woocommerce invoices fulfill all legal compliances by documenting your sales transactions. It’s crucial for tax purposes and audits. In fact, you can create VAT-compliant invoices in WooCommerce to meet all local tax regulations effortlessly. 

Sales Tracking

Invoices give you a clear record of your sales to help you monitor performance and spot trends in your business. This insight can guide your future decisions.

Proof of Purchase

For your customers, invoices serve as proof of purchase. In fact, this invoice is essential for handling returns, exchanges, and warranty claims in online purchases.

Building Customer Trust 

WooCommerce invoices enhance customer trust with clear documentation for returns, exchanges, and warranty claims with no hidden charges. And, as trust grows, customers are more likely to return and recommend your store to others, knowing they can rely on your processes. 

Streamline financial management 

Woocommerce invoicing makes financial management more efficient with the integration of WooCommerce invoices with accounting software. Again, these sales documents offer financial tracking and even different payment gateways for advance or late payments.

Resolving Disputes 

If any issues arise regarding payments, deliveries, or product returns, invoices provide a solid reference point that can help resolve disputes quickly and fairly.

Payment Tracking 

The online invoices help you keep track of payments received and any amounts still due, which is crucial for managing your cash flow effectively. By knowing what’s owed, you can plan your finances better and ensure you have the resources you need for your business. 

Store inventory management 

Invoices also play a significant role in managing your inventory levels by showing what’s sold and what needs restocking. This helps ensure you’re never caught off guard with low stock.

In short, WooCommerce invoices are not just paperwork; they’re essential tools for any B2B (business to business) and B2C (business to customers) businesses and enhance customer satisfaction.

Can WooCommerce generate an invoice?

No, WooCommerce doesn’t have any dedicated feature to create invoices. So, to generate an invoice for your woocommerce order, you either have to do this manually or use automation software like invoice plugins. 

Since the manual invoice creation process is error-prone and time-consuming, it’s always recommended to use WooCommerce invoice plugins to send WooCommerce invoices to your customers.

What are the best WooCommerce invoice plugins available?

There’re several plugins available for Woocommerce invoices, and you’ll get both free and paid options. Here’s the top 5 best WooCommerce invoice plugins:

1. Challan – PDF Invoice & Packing Slip for WooCommerce (the Free plugin for all type of invoice with advanced customization)

2. YITH WooCommerce PDF Invoices & Packing Slips (Paid with Cloud services)

3. Flexible PDF Invoices for WooCommerce & WordPress By WP Desk (Paid with customization based on business needs)

4. Print Invoice & Delivery Notes for WooCommerce By Tyche Softwares ( Additional feature for registered customers)

5. Sliced Invoices – WordPress Invoice Plugin By Sliced Invoices (Paid with reporting features and quotes to CSV)

To get more information and check out the detailed features of the plugins, checkout our complete guide on:
10 Best WooCommerce PDF Invoice Plugins for Professional Invoicing

Should you choose free or paid invoice plugin for your WooCommerce orders?

While paid plugins come with extra features, some free plugins also come with many unique features. However, you must have to look for some core features of an invoice plugin, whether it’s free or premium. 

Again, if you’ve just started your online store, then I’ll recommend you go with the free invoice generation plugins. And, as you grow, switch to premium if your business needs it.

What features should a WooCommerce invoice plugin have?

Well, as you can see, there’re plenty of automated invoice plugins available, but how you’ll choose the right one or your online store?

Well, let’s check out the key features of an invoice plugin for Woocommerce:

1. Automatically grab complete order data to generate an invoice.
2. Customized invoice templates
3. Multiple language support
4. Send invoice directly with order confirmation email
5. Integration with accounting software

These are the basic features an automated invoice generator plugin should have.

Bonus Tip: Best Woocommerce PDF Invoice plugin for Free

However, considering these initial features and other many custom options for free, most of the Woocommerce experts, even I, use the best yet free Woocommerce PDF invoice generator & print plugin-Challan.

This WooCommerce invoice plugin offers a 3-in-1 plan for free.

1. Invoice
2. Packing slip
3. Delivery notes

So, you can create all your delivery documents in one place. Again, Challan Pro offers some advanced and unique invoice customization options with 6 pre-built custom templates.

Even with multilingual support, you can also translate your invoices using Challan.

In fact, this PDF invoice print plugin provides a dedicated tab for the download, print, and attach to email option to deliver the most professional WooCommerce invoice along with other delivery slips.

How do I get an invoice from WooCommerce?

Typically, Woocommerce invoice processing includes 4 essential steps. These steps ensure that invoices are properly generated, customized, and delivered to your customers. 

So, let’s get a step-by-step guide to Woocommerce invoice processing with Challan (free):

Step 1: Install and Activate Woocommerce auto-invoice generator-Challan

Just go to your WordPress site >> Plugins >> Add New Plugin. From there, simply search for Challan and then install the plugin. 

Once you’ve installed the plugin, it’ll automatically start to generate WooCommerce invoices for your store orders.

Step 2: Customize Woocommerce Invoice

Once generated, you can customize the invoice to reflect your store’s branding. Simply go to Challan >> Settings to add the custom fields in your invoice. 

Here, you can add logos, modify layouts, store color & font, and adjust any necessary designs to fit your business needs. 

Step 3: Download or Print Invoice in WooCommerce: 

After customization, you can download your invoices or even print them for your Woocommerce store records. For this, go to WOocommerce >> Orders. Then, hit on Download or even print button to get the invoices for your selected orders. 

You can even bulk download your order invoices.

Step 4: Send invoice via Woocommerce order Email: 

Finally, automatically send the invoice to your customer via Woocommerce email so that they can find the invoice easily and get clear about their purchase and payment due. 

Just go to Challan >> Settings >> Invoice >> Attach invoice to email. Then, just select the order status according to your needs.

Well, that’s it. You’re done. You can use this invoice not only for your financial management but also to enhance your customer experience.

Best Practices of Woocommerce invoice Customization

WooCommerce store owners are no longer using random sales invoices. It’s because invoices now become a powerful marketing tool.

So, here are some best practices you can follow to make your PDF invoice more convenient for your customers and reflect your brand image as well.

1. Create multi-currency invoices: 

If you sell internationally, set up your invoices to show prices in different currencies. This’ll make it easier for your customers to calculate their purchase amount. In this case, you can use free multi-currency plugins to get the things automated.

2. Clearly include Tax/VAT in your PDF invoices:

If you only include the product price and purchase subtotal, there can arise a misunderstanding of including VAT/Tax. So, always show the tax amount separately and even add a proper VAT number with each invoice. It’ll completely clear up the extra cost, especially for international shipping.

3. Attach PDF Invoice to Order Confirmation Email: 

Sending order confirmation mail and invoice separately has now become an outdate practice. So, use plugins to automatically attach the invoice with order emails. This way, your customers can receive everything at once.

outdated

4. Add Multiple Payment Methods in the Invoice: 

If you want to receive payment through invoice, then add multiple Wocommerce invoice payment options like credit cards, PayPal, or bank transfers in the invoice. This flexibility not only makes it convenient for your customers to pay but also simplifies Woocommerce invoicing with more faster and secure payments.

5. Send WooCommerce Invoices with Payment Links: 

Now, to make the payment more convenient for your customers, you can  add payment links and a “Pay Now” button in the invoice. When your customers hit on the link, it’ll take them to the direct checkout page to automate the accounts payable and make the process more fast.

6. Automate remittance advice slip after invoice is paid

When an invoice is paid, a remittance advice is sent to the supplier to notify them that the payment has been made. This document serves as confirmation and helps keep both parties’ financial records accurate and up to date.

What are the common challenges in WooCommerce invoice processing, and how can they be solved?

When you deal with woocommerce invoices, you may face some challenges in invoice processing and management.

So, let’s check out the most common issues with WooCommerce invoices and the corresponding solutions:

• WooCommerce Invoice Not Working:

Sometimes, WooCommerce invoices may not generate or function properly. It can arise due to plugin conflicts or outdated versions.

Solution: Ensure your WooCommerce and invoicing plugins are up-to-date and compatible with WordPress and other plugins. 

• WooCommerce Invoice Not Showing Up:

Many store owners complain that their invoices fail to display for customers. And the most probable reason can be the incorrect configuration settings or template errors.

Solution: Review the invoice template and customization to ensure it’s properly set to appear with order confirmations or emails.

• Invoices Not Attached to Emails:

Customers may not receive invoices as attachments in their order confirmation emails.

Solution: Use an invoicing plugin that allows automatic attaching PDF invoices to emails. Make sure that the “attach invoice” option is enabled in the plugin’s settings.

• Inaccurate Tax Calculations:

In some cases, incorrect tax calculations can appear on your invoices. It’s either overcharging or undercharging customers.

Solution: Review tax settings in WooCommerce and ensure they align with local tax regulations. Use plugins that allow automatic tax calculations based on location.

• Delayed Invoice Delivery:

Your customers may experience delays in receiving their invoices via email. This can lead to order confusion and even affect payment processing.

Solution: Use reliable email services and set up automated email reminders for unpaid invoices to ensure timely delivery.

Differences between invoices and other purchase documents for order fulfillment

In the overall shipping process, many documents are involved, like an invoice, packing slip, delivery note, and shipping labels. Each document is required for a particular purpose and particular stage of delivery.

Let’s understand the purpose of the invoice and other documents in the table below:

woocommerce pdf invoices, packing slips, delivery notes, and shipping labels.

Again, to know more details, you can check our complete guide on invoice vs. packing slip.

FAQs:

Conclusion:

WooCommerce invoices play a vital role in the smooth operation of online stores. Furthermore, WooCommerce invoices facilitate efficient inventory management and support seamless integration with accounting software, ultimately contributing to better cash flow. And, if you are using Challan, then it’ll take care of all of your shipping process and, of course, your invoice.