How to make an invoice: A step-by-step guide

Creating accurate, professional invoices is a fundamental part of running a business—but it’s also where many early-stage teams lose time or introduce errors. Whether you're a founder, operator, or part of a finance team, understanding how to create invoices correctly helps ensure consistent cash flow and strengthens client relationships.

In this guide, we’ll walk through how to create an invoice step by step—what details to include, which tools to use, and how to avoid common mistakes. Plus, if your team is managing invoicing at scale, we’ll show you how Rho’s integrated spend and AP tools can help automate the process and eliminate manual work.

What is an invoice?

An invoice is a formal request for payment issued after goods or services have been delivered. It outlines what was provided, the amount due, and when payment is expected. Invoices aren’t just for freelancers or small vendors—they’re a key part of financial operations for any business.

Depending on your setup, you might generate invoices manually using a template or automate the process entirely through your accounting or spend management system. Either way, every invoice should follow a consistent structure—so your team stays aligned and your clients know exactly what to expect.

Invoices are also critical for internal tracking, audit readiness, and cash flow forecasting. Whether you're sending one invoice a month or hundreds, getting the structure right from the start makes reconciliation and reporting much easier down the line.

Key components of an invoice

Regardless of industry or scale, every invoice should include the same core details. Consistency reduces back-and-forth with clients and helps your finance team track and reconcile payments efficiently.

Here’s a checklist of what to include:

• Header: Label the document clearly as “Invoice.”
• Your business info: Name, address, email, phone number, and logo if applicable.
• Client information: Company name, contact person, billing address, and email.
• Invoice number: A unique ID for internal tracking and audit purposes.
• Invoice date and due date: When the invoice was issued and when payment is expected.
• Itemized breakdown: List of products or services delivered, including quantities, rates, and totals.
• Subtotal and taxes: Include a subtotal, taxes if applicable, and any discounts.
• Total due: Final amount to be paid.
• Payment terms: Accepted payment methods, due dates, and any late fees or early payment discounts.
• Optional notes: Space for project codes, internal PO numbers, or a short thank-you message.

If you use invoicing software or a platform like Rho, many of these fields can be automatically populated and processed, reducing the risk of manual errors.

Step-by-step guide to creating an invoice

Creating an invoice is straightforward once you understand the key components. Whether you’re doing it manually from scratch, with an invoice template, or through software, following a consistent process helps reduce delays and avoid errors.

1. Choose a format

Start with a clean invoice template, invoicing software, or a spend management platform. The goal is consistency—every invoice you send should follow the same structure.

2. Enter your business and client details

Include your business name, company name, phone number, key contact information name and address, followed by the client’s billing details. This makes it easy for both sides to reconcile payments and match to purchase orders, if needed.

3. Assign an invoice number and dates

Use a unique invoice number and include both the issue date and due date. This helps with tracking and ensures everyone’s aligned on timelines.

4. Add an itemized list of charges

Use clear, detailed line items with descriptions, quantities, and hourly rate or unit price. An itemized breakdown speeds up approvals and eliminates back-and-forth.

5. Include taxes, discounts, and the final total

Apply any relevant sales tax, service fees, or discounts. Then calculate the total amount due.

6. Define payment terms

Be specific about payment methods accepted (e.g. credit card, PayPal, bank transfer).

If you offer early payment discounts, late fees or purchase order references, include those here as well.

7. Review and send

Double-check all fields for accuracy before sending. Invoicing platforms like Rho can automate this process and reduce manual entry—especially helpful at scale.

Tips for effective invoicing

Even small improvements to your invoicing process can speed up payments and reduce time spent chasing down outstanding balances. These best practices help keep things efficient and professional—especially as you scale.

• Be consistent: Use the same format and numbering system across all invoices. It reduces confusion for clients and simplifies tracking on your end.
• Be clear: Avoid vague line items. Describe services or products in a way the recipient will understand—especially if multiple teams are involved in approval.
• Invoice promptly: Send invoices as soon as the work is completed or the billing cycle ends. Delays in invoicing often lead to delays in payment.
• Follow up methodically: Don’t wait until an invoice is weeks overdue to follow up. Use reminders or automation to flag upcoming or past-due invoices.
• Centralize your invoicing: If your team is managing multiple vendors or departments, tools like Rho’s AP automation can centralize invoice intake and streamline approvals—cutting down on manual routing and delays.

Utilizing invoice templates and tools

While you can always build invoices from scratch, most businesses benefit from using tools that reduce manual work and enforce consistency. 

As your business grows, managing invoices manually becomes harder to scale—and easier to get wrong.

For small teams or one-off use:

• Microsoft Word or Excel: Good for simple invoice creation, especially if you’re just starting out.
• Google Docs or Sheets: Useful for cloud-based sharing and basic tracking.
• Design tools like Canva: Ideal for freelancers or agencies who want more visually polished templates.

For scaling finance teams:

• Rho’s AP Automation: If you’re managing dozens (or hundreds) of invoices, Rho can centralize intake, automatically extract invoice data, and pre-populate payment details—minimizing manual entry and speeding up approvals.
• Integrated spend management: Rho connects invoice intake with budgets, payment scheduling, and accounting system syncs  with your accounting software like QuickBooks. This gives you visibility from invoice to payment, all in one platform.

With the right tools, your team can move from reactive, manual processes to a more automated, controlled workflow that scales with your business. 

Go from invoice creation to payment easily

Creating invoices might seem like a routine task, but it plays a key role in keeping your cash flow predictable and your financial records clean. Whether you're just getting started or managing high-volume AP workflows, the fundamentals remain the same: be clear, be consistent, and avoid manual errors wherever possible.

If your team is scaling and looking to automate invoice intake, routing, and approvals, Rho’s AP Automation platform can help streamline the entire process—from invoice creation to payment. It’s built for finance teams that need visibility, control, and speed.

‍