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Purchase bill format for Research and Development

creating invoices is a key task for limited companies no matter what's your size or sector and in this video we cover how to create professional and accurate invoices for your limited company [Music] hi there Nicholas cabinet here from first summations the UK's leading company information agent knowing how to create an invoice is vital to ensuring your business receives payments properly and on time late payments are thought to cost small businesses as much as 684 million pounds a year with most companies receiving payments five to eight days late on average providing clients with a professional and accurate invoice is an effective way to encourage prompt payments for your goods and services and in this video we'll take you through the process of creating a standard invoice and a vat invoice covering everything you'll need to include as a limited company let's get started so what is an invoice and when is it needed before we get into how to create your invoice let's begin with the basics an invoice is a legally binding document sent to a client or a customer before or after purchasing a product or a service from your company it's an integral part of bookkeeping and not only records a sale but also serves as a payment request notifying the customer of what was purchased and the payment terms as a limited company you are legally required to issue invoices that display your company registration number and registered office address if you are Vat registered you must also include your vat number and ensure compliance with hmrc's rules on v80 invoices whenever you need to collect payment from a client or customer you'll need to issue an invoice let's get started with the first step of creating a standard invoice using a professional format as a legal document it is important that your invoice looks the part and there are a number of tools that you can use to achieve this you can simply format it yourself with an everyday word processor like Microsoft Word or Google Docs or a spreadsheet like Excel all of which have a selection of built-in sample invoice templates that you can make use of or you can source and easily customize an invoice template via a bookkeeping software like Sage or freshbooks or through a free design app like canva whatever tool you decide to use to create your invoices always ensure you choose a clear font and the professional styling to reflect your brand you should also include a uniform header that features your company logo and if possible try to incorporate your brand colors too to help make your invoice easily recognizable to make your invoice stand out even more consider adding some extra on-brand personal touches such as your company tagline or mission statement and sign it off with a thank you message the second step is to input your business details now that you have your template in place it's time to populate it with your key business details you'll need to add information for both your own company and the individual or business that you're invoicing this will usually include your trading name and correspondence address your contact information such as your telephone number and email address the clients company name address and contact name the client's contact information such as their telephone number and email address your full registered company name your registered office address and your company registration number as a limited company it is a legal requirement for you to reference your full registered company name on any invoices that you sent if your trading name is different you should also include this to help clients recognize you the easiest way to do this is to use a phrase like ABC technology Services Limited trading as ABC Tech this is usually added to the footer of the invoice along with your registered office address and Company registration number for limited companies it's also important to note that if you decide to add in names of your directors on your invoice you must be sure to include the names of all directors to comply with hmrc rules once inputted we recommend thoroughly checking over this information before sending it to a customer to ensure all the details are 100 accurate this will help minimize any unnecessary delays to your payment next up is labeling and identifying your invoice it may sound obvious but make sure you clearly label your invoice with the actual word invoice in a prominent position at the top of your document in a bold or title font this will ensure that your client knows exactly what they have received and reduces the chances of it being misplaced or buried amongst other male government guidelines also require you to include a unique identification number also known as the invoice number on every invoice that you send this is a useful and important feature as it helps both you and your client keep track of invoices at any time be it to chase up late payments or review a past transaction how you choose to formulate your unique identification number is completely up to you most companies opt for a sequence of numbers that work in a consecutive pattern whilst others choose to combine both letters and numbers whatever format that you choose keep it consistent and use a pattern that will link to your internal systems so that you can quickly distinguish between different invoice types and clients placing the invoice number at the top right or left hand side of the invoice will make it easy to spot next summarize the purchased goods or services now that you've identified your invoice and populated it with your business details it's time to itemize the goods or services that you have provided it's important here to be as concise as possible whilst including enough description so that your client can easily recognize the transaction in question a good way to achieve this is by drawing up a table that lists each item and any related details such as price and quantity in an organized fashion row by Row for example includes columns for the following details the name of the product or service a brief description of the product or service the quantity provided and the cost of each individual product or service now that you have summarized your goods or services break down the costs and add a total balance at the end of the itemized table that you have created you'll want to add up and display the grand total that's due from your client in addition to the product Source services that you've listed you may also need to charge for extras such as tax or shipping or apply a discount to ensure this information is clear include a subtotal and then add any additional charges or discounts below it before stating your final total it's a good idea to bold the final total font or enlarge it slightly to make sure it's easy and quick to interpret if your business is registered for vat you'll need to issue a vat invoice which is different from a standard invoice we explore this in more detail later make sure to include the relevant dates also there are three key dates that you should ensure your invoice includes the first is the invoices issue date this should be located at the top of your invoice so you and your client can instantly determine when the invoice was sent second is the supply date in other words the date when the goods or services were provided if you have supplied multiple products or Services then the dates may vary add a date column to your items tables to show the accompanying Supply date for each product or service that was delivered finally and perhaps most importantly when it comes to prompting on-time payments is the due date this is the date by which you expect to receive the payment if a payment does not reach you by the state then it is classed as late the final step is to list your payment terms you'll likely have already agrees on payment terms up front with your client before issuing their invoice however it is still good practice to note the terms on the invoice itself as a solid reminder as well as the due date your payment terms should reference how you would like the client to pay as well as your bank details so that they have all the information to hand to make the payment it's a good idea to offer a selection of payment methods for them to choose from to help move the payment process along as swiftly as possible typical payment options may include bank transfer PayPal cash check debit and credit card for clients with a repeat purchase history offering a direct debit option can be an efficient way to manage regular payments giving both you and the customer peace of mind you could include details of how to set this up within your payment terms this section might also include the currency in which you deal if your company operates across borders if you charge late penalty fees add full details of this to your payment terms and that's it for the standard invoice now let's turn our attention to how to Creator vat invoice if your company is registered for vat you are legally required to provide a vat invoice which as we mentioned earlier differs from a standard invoice you'll need all the same details as included in a standard invoice plus some extra vat related details as follows your vat registration number the unit price for each product or service the vat rate charged and the total amount excluding vat there are three different rates of v80 you might charge these are standard rate this applies to most products and services unless they fall under a reduced or zero rate currently the standard rate of v80 in the UK is 20 percent reduced rate this is a lower rate of vat that applies to a specific selection of goods and services and depends on the circumstances of the sale and finally zero rate zero rate means that the goods or services that you've provided are still vat taxable but the vat rate you charge is zero percent you must still record zero rated sales in your vat accounts and report them when it comes to your vat return visit thegov.uk website if you're unsure about what v80 rates your company should be charging it's important that you specify which vat rates you've applied in your invoice so there you have it everything that you need to know about creating an invoice as a limited company remember when it comes to writing an invoice especially for the first time it's always a good idea to refer to the gov.uk website to ensure full compliance with the rules that apply to limited companies if you have any questions please leave them in the comments section below and we'll get straight back to you and if you're thinking about starting a limited company we'd love to help you we offer a variety of company formation packages all designed to get your business up and running as quickly and as simply as possible take a look at first formations dot Co dot UK that's one St for all of our formation options in the meantime be sure to subscribe to our channel to get more tips and advice on limited companies reporting requirements tax obligations and more we're always happy to help and we can't wait to hear from you until next time cheerio [Music]