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Whatever kind of business you run, invoicing is an essential part of your ability to make money and to create a good professional image. But it can be a confusing process, especially if you are just starting out in business, whether you are running a small to medium-sized enterprise or setting yourself up as a sole trader. Without knowing how to send proper, professional invoices, it can be difficult to get paid for your services in a timely manner.

We’ve put together this guide to help you learn everything you need to know about invoicing and why a template for invoices can be one of the most useful items your business can have.

What is an invoice?

An invoice is an important financial document that gives all the details about a specific transaction between you and a client. It lets your client know how much money they owe you and details the goods and/or services they are paying for.

Your invoice also tells your client how you expect to be paid, such as by bank transfer or PayPal, for example, and gives them details of how they can make that payment. In addition, it shows them the date you expect payment by, enabling you to keep your books balanced and stay on top of late payments.

An invoice also serves some other extremely important purposes. It provides a record for you and your client, which you will both need to use in your bookkeeping. For you, it serves as proof of the work you have done and the amount you charged for it. For your client, it details the products or services they bought, and how much they paid for them. This information is essential for your tax returns.

This is a lot to expect from one small document. So how can it be done? By including all the right information on your invoice.

What information needs to be included in an invoice template?

Components of invoice templates

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There are a number of important pieces of information that business invoice templates need to include so the invoice serves all the right purposes for you and your customer:

1. The word “Invoice”

This may sound obvious but the word “Invoice” needs to be displayed prominently at or near the top of the document. If you forget to include it, your client may not realize the document is important so it could be put aside and forgotten.

2. Your contact details

Your invoice needs to include the name, address and phone number of your business. These show the client which company the invoice is from and also give them a way to contact you in case they need to ask anything about the invoice.

3. A unique reference number

Giving each invoice a unique reference number makes your invoices much easier to track. It also makes it clear which invoice the customer is referring to if they have a query or are making a payment. Unique reference numbers are usually allocated in numerical order. They can also include a code specific to that particular client.

4. Your client’s contact details

Your invoice should include the name, address and phone number of your client. This makes it easy for you to identify which customer is making the payment. It also gives you their details instantly if you need to chase a late payment.

5. The date the invoice was issued

This shows the customer when the purchase was made and how long they have to pay the invoice.

6. The payment due date

Most businesses offer the client a grace period of seven, 14 or 28 days to make the payment, starting from the issue date of the invoice. Once this period has expired, the payment becomes late. You need to include the due date so you know when to start chasing payments.

7. The amount of money due

Your invoice needs to state clearly the total amount owed to you by the client to avoid any confusion.

8. A breakdown of what the invoice is for

Your invoice needs to include details of exactly what the client is paying you for. This could be a single item, such as a laptop, for example. If you use Billdu invoice maker, you can easily add items to your invoice using an inbuilt barcode/QR code scanner. But it might also include charges for other items such as software or services like installation. It is important to detail each individual item and what it cost, as well as the total amount of payment due. If the customer orders multiple of the same item, you don’t need to list each one individually; you can abbreviate, for example, 10 laptops @ $500 per unit = $5,000. This is fine as long as it makes it clear to the customer exactly what they owe and what for.

This list covers the absolute basic amount of information which needs to be included on an invoice in the USA. Other countries have different laws about the requirements for invoices. For example, in the UK, if your business and your client are both registered for VAT, your invoice will also need to include the VAT amount. In Australia, invoices also need to provide the Australian Business Number (ABN) of your business, and the GST amount, if applicable. It is important to check what the law is regarding invoices in the country where your business is based.

The importance of a professional-looking invoice

Why you need professional invoices

Every document you send needs to reinforce the professional image of your business in the minds of your clients. This is especially the case with invoices, as they contain a lot of important information. All of this information needs to be presented in a way which is clear, concise, and as easy as possible for your clients to understand when reading it quickly. Remember, they are as busy as you are!

The quality of your invoices has a direct impact on the amount of repeat business you receive. If your invoices are tidy and professional-looking, and can easily be read and understood quickly, this demonstrates that you are a company which understands the needs of your clients. If it also includes your company branding, this is even better, as it reinforces the awareness of your brand for your clients and shows that you have taken the time to create professional-looking documentation so that you will be taken more seriously. This will make your clients more likely to want to work with you again in the future.

For maximum impact and ease of use, it is worth using an invoice template designed by a professional company which has your needs in mind. This way, you can easily make sure all the relevant information is included, and that it is presented in a clear, user-friendly way for maximum client appeal.

Identifying the ideal invoice template

A good invoice template will have several essential features which create the right impression for your business:

Firstly, the template needs to present all the relevant information in a clear and straightforward way which is easy to read. Your clients should not have to spend a lot of time trying to make sense of your invoices. This is also important for you, as time is precious when you are running a business, so you need a template which can be completed quickly and easily.

Secondly, you don’t want to be restricted to only doing business when you are in the office. This means you need an invoice template which enables you to create and send invoices on a variety of different devices, so the template should be downloadable in a number of the most popular formats, including PDF. In addition, a good invoice template will be backed up by high-quality software which makes life even more convenient for you by enabling you to create and send invoices from anywhere at any time.

Finally, your template for invoices should be easy to customise. It needs to be adaptable so that it can suit all the needs of your business and your different clients. It also needs to be able to include your company branding, as this instantly creates a more professional and memorable image.

Try the free invoice template from Billdu

Billdu is a solution that makes invoicing quick and easy for small to medium-sized businesses and sole traders. Designed with your specific needs in mind, it enables you to create and send a professional-looking invoice in seconds, with a simple invoice template that contains all the information you and your clients need. It is easy to customize so you can include the essential branding which sets your business apart from the rest, giving you a distinct advantage in today’s marketplace. It even automatically generates and sends recurring invoices for you.

This simple and effective template for invoices is backed up by an intuitive app that is available for iOS and Android, as well as an online-based software solution for PC. This means you don’t have to be in the office to create and send your invoices – you can do it from anywhere in the world. It also makes it easy for you to track invoices, and give your customers a simple, instant payment option by adding a Pay button.

You can download our sample invoice template for FREE by clicking on the button below.

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We have them ready for you, select your format and get your invoice template now

When you are running a business, it is essential to have a grasp of the important metrics which are used to measure performance. These offer you the best way of analyzing the profitability of your business, enabling you to make sensible and informed decisions going forward.

EBIT and EBITDA are two of these metrics. But what do they mean? What is the difference between them? How are they calculated and what are the impacts they can have on your business?

We have put together this guide to EBIT and EBITDA, telling you everything you need to know and taking the confusion out of these metrics. This will enable you to put them to good use in running your business successfully.

What is EBIT?

EBIT stands for Earnings Before Interest and Taxes. It is the net income of your business before deductions for income tax and interest expenses have been made. It is sometimes referred to as your operating profit or operating earnings.

EBIT is an extremely useful metric for analyzing the true profitability of your business as it looks specifically at the earnings you generate from your operations. This gives you a clear picture of how efficiently your business is running and how wisely money is being spent as it only focuses on the costs which you can control. As tax and interest expenses are not within your control, including them can cause some confusion when it comes to working out the profitability of your business. In some respects, your EBIT is a more useful metric than your net income.

However, your EBIT is not a figure you need to include in your financial statements. Instead, it is a useful tool which shows you the financial health of your business, letting you know when you need to take corrective action.

How to calculate EBIT

Billdu Advice Calculating EBIT how to

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You can calculate EBIT for your business by using the following formula:

EBIT = net income + interest expense + tax expense

Calculating EBIT can be extremely useful as long as you know how to interpret the results and understand exactly what they mean.

If your EBIT is lower than your net income, this means your business is not generating enough profit. A healthy business should always have an EBIT which is at least equal to its net income, and preferably higher than it. A low EBIT is a clear warning that you need to do some corrective work.

So, what can you do if your EBIT is low? You have two options. The most obvious course of action is to reduce your spending. This could mean switching to cheaper suppliers, scaling back your marketing activities, or reducing your overheads in any number of ways. The second option is to find ways to increase your revenue. If you can achieve one or both of these objectives, your EBIT will rise, demonstrating that your business is becoming more profitable.

What is EBITDA?

EBITDA is another metric which is widely used to analyze the performance of your business and enable you to forecast how much your business has the potential to earn. It stands for Earnings Before Interest, Taxes, Depreciation and Amortization. This means it offers additional insights when compared to your net income or EBIT as it takes into account the effects of two extra variables:

  1. Depreciation – the amount by which the assets belonging to your business reduce in value over time.
  2. Amortization – the cost of repayments of debts, such as a fixed payment schedule on a business loan.

By accounting for these additional expenses as well as interest and taxes, calculating EBITDA can enable you to focus even more clearly on the actual profitability and performance of your business. It removes all the variables which are not directly related to your operations.

How to calculate EBITDA

There are two different ways of calculating EBIDTA for your business:

EBITDA = EBIT + depreciation + amortization

Or

EBITDA = net income + interest + taxes + depreciation + amortization

This metric is particularly useful for businesses that own a lot of assets or have debts as it enables you to make better projections and plan your future expenditures more wisely.

Advantages of EBITDA vs net income or EBIT

EBITDA vs net income

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EBITDA is widely used by both investors and business owners as it enables you to compare the profitability of different companies and even different industries. This is because it offers a means of assessing how different businesses manage their debts and the depreciation of their assets. This can be extremely useful for investors trying to choose the right business to invest in.

EBITDA can also be used by business owners to normalize business earnings. The business can appear as profitable as possible and future projections can be made more accurately. This can be extremely advantageous when you are trying to attract investment.

For example, you can normalize your EBITDA by including non-recurring expenses such as startup costs, repairs, and other one-time expenses such as a product launch. This paints the best possible financial picture of your business.

However, investors tend to be aware of the ways businesses can manipulate their EBITDA. It can make them suspicious that you could be making your business look more profitable than it really is. For this reason, an experienced investor will expect you to provide them with other metrics in addition to or instead of your EBITDA, such as your operating cash flow, which also includes working capital and the costs associated with it.

Some investors also prefer to use a metric that includes the costs of taxes and interest. This reassures them that your business is trustworthy and reliable, making all the required payments on its loans, and being run legally, fulfilling all its tax obligations.

In order to paint a complete picture of the financial health of a business, it is not unusual to use four or five different metrics, possibly more, depending on the nature of your business and how much information investors want to see. EBITDA is only one of these, and due to how easily it can be manipulated, it is not allowed in GAAP (Generally Accepted Accounting Principles) reporting for public companies. However, for small businesses, it can be a useful tool for analyzing the financial wellbeing and security of your business, as well as helping you to plan more effectively for the future.

How to calculate EBIT and EBITDA more easily using Billdu

When you need to calculate performance metrics such as EBIT or EBIDTA, it helps to have all the information you need in one place. Otherwise, you can spend a significant amount of time trying to find and analyze a huge number of different documents. This is not a situation you want to find yourself in if you have an important meeting coming up which could secure new investment for your business.

Billdu makes it much easier for you to calculate the performance metrics you need as it offers you an ideal starting point by calculating your net income for you. This is thanks to the powerful cloud-based system, which stores all your financial information securely in one place. Every time you make a purchase or receive a payment, this information is processed by the system and integrated into the cloud in the right order, so all the figures you need are at your fingertips whenever you need them.

Even better, Billdu enables you to calculate important performance metrics at any time and in any place. Its online software can be accessed from any PC but it also comes with sophisticated mobile apps for iOS and Android. This means you can produce the information you need even when you are away from the office – and even if you choose to change your smartphone, you can still continue to run your business seamlessly.

More and more small businesses are turning to Billdu to help make life easier and more streamlined. Billdu takes care of the mundane tasks involved in the day-to-day running of your business, freeing up more of your time so you can concentrate on making your business more profitable. It is also incredibly easy to customize to suit your individual needs.

If you would like to find out why our solution is so popular, you can experience it for yourself with a free trial.

Calculating EBIT and EBITDA in a breeze

Try Billdu today to start creating professional invoices and tracking your expenses online or via our mobile apps. Have balance instantly calculated and displayed on your Billdu Dashboard. Register for a free trial below now!.

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The app you choose to track your finances can have a huge impact on the smooth running of your business. But with so many different options now available, which is the best option if you are a small business owner looking to make your life easier and cut down on the time spent on some of your administrative and financial tasks?

We’ve taken a detailed look at one of the most popular solutions, FreshBooks, to see how it compares with Billdu and other leading invoice apps/software solutions so you can make an informed decision about which product is right for you.

What is FreshBooks?

FreshBooks is a software package aimed mainly at small businesses. It is a cloud-based solution so it can be accessed from any browser. It also comes with apps for iOS and Android so you can use it from your smartphone. Any actions you take on your phone are fully integrated with the system in the cloud.

The FreshBooks cloud accounting system is designed to make the financial and administrative aspects of running a business easier and more efficient, saving you time and automating some of the most mundane tasks you have to undertake on a regular basis.

The main features of FreshBooks include:

1. Invoicing

The Fresh Books software makes it easy to create a professional-looking invoice and customize it to reflect your brand. You can do this from anywhere with the mobile apps; you are not restricted to only sending invoices from the office.

FreshBooks can also automatically calculate the taxes on your invoice, enable you to send invoices in a wide variety of different currencies, and also track them so you can instantly see when they have been viewed and paid.

2. Expense tracking

The system enables you to see all your spending and profits at a glance without needing to go through individual receipts or spreadsheets. This is done via clever FreshBooks integrations with your bank account or credit card. It also contains a feature which enables you to take a photograph of a receipt on your phone and log it. The software will organize it into the system for you.

Your expenses are updated daily, making it easy for you to keep track of your spending on a specific project or for the whole of your business.

3. Time tracking

This is a useful feature as your time costs money. It is essential to know how much time you are spending on a particular project or client. You can start and stop the timer as required and it gives you a time log, which can then be put onto an invoice. This can be done from anywhere via the FreshBooks apps so if you are working away from the office, you can still track your time.

This timer is particularly useful because it is easy to create different categories and see at a glance how much time you are spending on each project.

4. Project management

Fresh Books makes collaboration easy as it offers centralized storage, making it quick and simple for all team members to find the documents they need and share their thoughts and activities with each other. Permissions can be set so that only those working on a project have access to it.

You can also include clients on projects, making it easier for them to give feedback at every stage of the process and ensuring everything stays on track.

5. Estimates

The FreshBooks software enables you to create and customize estimates and proposals quickly and easily, listing elements such as scope, timeline and cost. The client can approve this with a single click so work on the project can begin quickly.

Estimates can also be transformed into invoices almost instantly so you can get paid sooner. Like your invoices, your estimates can also be tracked so you can see when they have been viewed and accepted. They can be sent from anywhere via the FreshBooks apps.

6. Payments

FreshBooks payments offer your clients an easy way to pay invoices: by clicking a button on the invoice itself. The software automatically registers each payment as it comes into your account so your books are always balanced. You can also choose which account you want payments deposited into.

Offering your clients this level of convenience ensures you will get paid more quickly for the work you do.

7. Reports

Fresh Books also includes a number of tools to make reporting easier, offering you the insights you need into the progress of your business and helping you to keep your books balanced. It also enables you to share these reports with your accountant, making sure everything is exactly where you need it when it comes time to send in your tax returns.

How does FreshBooks compare to Billdu?

Billdu Professional invoice maker with android and ios apps

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Billdu is a new and highly streamlined system that offers essential ease and convenience to small businesses at highly affordable prices. Like FreshBooks, it is a cloud-based system that can be accessed from any PC, and it also comes with mobile apps for both Android and iOS.

Billdu’s main purpose is to make it easier to invoice your clients and track your expenses (for example, you can quickly add invoice items with the barcode scanner), which are the most essential things any small business needs. It has an extremely user-friendly interface, with a more modern design than FreshBooks. It is more intuitive on all devices. Customizing your invoices is easier with Billdu than it is with Fresh Books, giving you more options when it comes to design.

Billdu ultimately offers better value as it has all the same features as FreshBooks except for time tracking and reports. However, given the significantly lower cost and increased ease of use, Billdu is an ideal choice for many small businesses who can’t afford expensive solutions. It also gives you more control over which features you want to include as the three different plans available differ far more than those offered by the FreshBooks pricing model.

FreshBooks vs QuickBooks

QuickBooks Online accounting software

We have already done a comparison between Billdu and QuickBooks in a previous article so we thought a direct comparison of QuickBooks vs FreshBooks would be more useful here. Quick Books is the market leader and it is widely used by businesses in all industries worldwide. However, is it necessarily the best solution for your small business?

QuickBooks, like the other two systems, is cloud-based and comes with mobile apps for iOS and Android. However, if you want to customize your invoices, this can only be done from the software version, not from the mobile apps. FreshBooks and Billdu have the advantage here. In addition, while QuickBooks does offer a time tracking tool, it is not as sophisticated as the one offered by Fresh Books, which is unexpected from the market leader.

However, reporting in QuickBooks is far more advanced than it is in FreshBooks. QuickBooks offers a much more extensive range of reporting options, and the information is presented in a way which makes it much easier for you and your accountant to understand. It also features a chart of accounts, which is extremely useful if your business has more than one bank account and credit card.

If your business is expanding rapidly, QuickBooks also has the advantage here. It allows you unlimited clients, while in FreshBooks you are restricted to 500. This means the right system to choose will depend entirely on the needs of your business.

FreshBooks pricing vs Billdu and QuickBooks

You can’t get any version of FreshBooks free. Like Billdu and QuickBooks, FreshBooks pricing comes in three different levels to suit your needs. We have compared the monthly cost of all three so you can see exactly what you get for your money.

Billdu:

  1. Starter – $1.99
  2. Standard – $7.99
  3. Premium – $14,.99

The Starter package from Billdu is very basic, coming with just the invoicing and expense tracking features. However, the Standard package is extremely good as it comes with all but two of the features available in Premium. The main difference between the two is that the Premium package offers you larger numbers of users and invoices.

FreshBooks:

  1. Lite – $15
  2. Plus – $25
  3. Premium – $50

The Lite version of FreshBooks offers more features than the Billdu Starter package but at a vastly increased cost. In addition, if you want to add more users, you have to pay an extra $10 per person, even with the Premium package. As your team expands, this can end up costing you a lot.

QuickBooks:

  1. Simple Start – $15
  2. Essentials – $35
  3. Plus – $60

QuickBooks is the most expensive of the three systems, and it has a particularly complex pricing structure. It is difficult to see, even on their website, which features come as standard and which you have to pay extra for as you can pay for different combinations of features and numbers of users. This complicated structure is a disadvantage as small business owners want a quick and convenient solution that will not take too much time to set up.

The verdict

There is no ‘best’ app – choosing the right app for you will depend on what your business does, how many invoices you send, how many staff you have on your team, and a wide variety of other factors. It is important to do your research before making such an important purchase decision, and we hope this article has helped.

If you would like more information about Billdu and the many features it offers, please check out the Features page on our website.

Looking for an invoicing app, quote maker app & expense tracker similar to FreshBooks?

If you were thinking of FreshBooks, try Billdu today to start creating professional invoices and tracking your expenses via our user-friendly online dashboard and mobile apps. Register for a free trial now!.

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Looking for Downloadable Invoice Templates?

We have them ready for you, select your format and get your invoice template now


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