How to make an invoice in six steps, with an example

To make an invoice you need three things: the details the tax rules require, a unique and sequential invoice number, and a clear statement of what you delivered and what it costs including VAT. In this article you can read how to build an invoice in six steps, see a worked example with two VAT rates, and find out which mistakes most often delay your payment.

Who is this for? The structure of an invoice is set at EU level in the VAT Directive, so the six steps apply broadly. The specific figures are not universal: retention periods, small business schemes and VAT rates are national. Where this article gives concrete numbers, it uses the Dutch rates as an example and says so. Invoicing from another country? Follow the steps and look up the amounts and deadlines with your own tax authority.

Looking for something more specific? If you are after the legal requirements themselves, read what has to appear on an invoice. If you want to know how to send it and chase the payment, see sending an invoice. And if your issue is volume and turnaround rather than content, efficient invoicing covers the process side.

Table of contents

• What has to be on an invoice?
• How do you make an invoice in six steps?
  • 1. Collect the details before you start
  • 2. Assign a unique, sequential number
  • 3. Set out the lines
  • 4. Apply the right VAT treatment
  • 5. Add the payment details
  • 6. Check, send and file
• A worked example with two VAT rates
• Common mistakes when making invoices
• Which tool do you use?
• What if the invoice is not paid?
• What your customer needs to process your invoice automatically
• Frequently asked questions about making invoices
• In closing

What has to be on an invoice?

An invoice is an official document stating what you delivered to a customer and what has to be paid for it. The minimum content is set at EU level by the VAT Directive, but member states add their own requirements and the invoice follows the rules of the country where the supply is taxable. The European Commission publishes the EU baseline on its invoicing rules page. In practice the list looks like this:

Your details	Name, address, VAT identification number and, in most countries, your trade register number
Your customer’s details	Name and address, plus their VAT number on a cross-border supply within the EU
Invoice identity	A unique and sequential invoice number, and the issue date
What you delivered	A clear description with quantities and unit prices, and the date of supply
The money	Amount excluding VAT, the rate applied, the VAT amount and the total including VAT, split per rate
Payment	Payment term or due date, and your bank details

For the requirements in more depth, including the cases where extra wording is needed such as a reverse charge or a margin scheme, see our article on the requirements an invoice has to meet.

How do you make an invoice in six steps?

An invoice comes together in six steps: collect the details, assign a number, set out the lines, apply the VAT treatment, add the payment details, and check before sending. Steps 1 to 3 are administrative, step 4 is where most mistakes are made, and steps 5 and 6 decide how quickly you get paid. Per step you can read below what you do and what you have at the end of it.

1. Collect the details before you start

Gather your customer’s legal name and address as they appear in the contract, their VAT number for a cross-border supply, and any reference they asked you to quote, such as a purchase order or project code. That last one matters more than it looks: an invoice without the reference your customer’s system expects tends to sit in a queue waiting for someone to work out where it belongs. Note the date of supply as well, because it can differ from the issue date. Result: every field filled from a source, not from memory.

2. Assign a unique, sequential number

Every invoice needs its own number in an unbroken series, so your records can be followed from the outside. Pick a simple format and stick to it, for example the year followed by a running number. Do not reuse numbers, do not leave gaps, and if you cancel an invoice, resolve it with a credit note rather than by deleting the number from your series. Gaps and duplicates are the first thing an inspection looks for. Result: a number that is traceable and defensible.

3. Set out the lines

Describe per line what you delivered, in how many units and at what unit price. Be specific enough that someone who was not involved can tell what was supplied: “consultancy” says little, “consultancy, 12 hours, project X, June” says everything. Split items that carry different VAT rates onto separate lines, because a mixed line cannot be coded correctly later. Result: lines that stand on their own, without a phone call to explain them.

4. Apply the right VAT treatment

Show the amount excluding VAT, the rate per line, the VAT amount and the total including VAT, split per rate. Where you do not charge VAT, the invoice has to say why: an exemption, a small business scheme or a reverse charge on a cross-border supply to a business. In that last case you also state your customer’s VAT number and verify it first. This is the step where errors surface months later, at your customer’s VAT return rather than at yours. Result: a VAT presentation that holds up on both sides of the transaction.

5. Add the payment details

State the payment term or, better, an actual due date, because a date needs no calculating. Add your IBAN, and the BIC if you invoice outside the SEPA area. Keep your bank details identical to what you used last time: a supplier whose account number suddenly changes is the classic invoice fraud pattern, and a careful customer will pause the payment to verify it. Result: a customer who can pay without asking you anything first.

6. Check, send and file

Read the invoice once more against step 1: right party, right amounts, right VAT, right reference. Then send it through the channel your customer accepts and file your own copy, digitally is fine in most countries. Retention periods are set nationally and commonly run to seven years or more for VAT records, so file it in a way you can still search in five years. Result: an invoice out the door and a copy you can find again.

A worked example with two VAT rates

Suppose you delivered a training course along with the course books. In the Netherlands, training falls under the standard rate of 21% and books under the reduced rate of 9%. Your own rates will differ, but the mechanism is the same everywhere. The invoice then looks like this:

Training, 12 hours × € 95.00	21%	€ 1,140.00
Course books, 20 × € 18.00	9%	€ 360.00
Subtotal excluding VAT		€ 1,500.00
VAT 21% on € 1,140.00		€ 239.40
VAT 9% on € 360.00		€ 32.40
Total payable		€ 1,771.80

Note what happens here: the VAT is shown per rate, not as a single figure of € 271.80. That is a requirement rather than a formatting choice, and it is also what your customer’s bookkeeping needs in order to code each line to the right general ledger account. Had you put the training and the books on one line, the invoice would have been incorrect and your customer would have had to send it back.

Common mistakes when making invoices

These six come up most often, and five of them cost you mainly time in collecting your money:

• VAT rates merged onto one line. The totals may add up, but the invoice cannot be coded and is formally incorrect.
• Editing the original after sending. A sent invoice is corrected with a credit note plus a new invoice, not by overwriting the file.
• Not verifying an EU customer’s VAT number. If the number turns out to be invalid, the 0% rate was not justified and you are left carrying the VAT.
• Forgetting your customer’s reference. Without the purchase order number, your invoice lands in a manual queue at larger organisations.
• Invoicing late. The payment term only starts on receipt, so every week you wait is a week later paid.
• Giving a payment term but no date. “Within 30 days” is something the reader has to calculate; a due date is not.

Which tool do you use?

• By hand: a template in a word processor or spreadsheet. Workable for a handful of invoices a month, but the numbering and the VAT calculation are yours to maintain.
• Invoicing software: automates exactly the parts that go wrong, namely step 2 and step 4, and usually sends reminders as well.
• Online tools: free or low-cost platforms with ready templates, which suits someone just starting out.

Where this stands in 2026: e-invoicing mandates are arriving country by country rather than all at once. In the Netherlands, for instance, structured e-invoicing is already required for supplies to government bodies but not yet for domestic business-to-business transactions, while at EU level cross-border business-to-business e-invoicing is moving towards an obligation. A template in a word processor cannot produce such a file, so if you invoice organisations rather than consumers, software that can output a structured format saves you a migration later. Read what creating an e-invoice involves.

What if the invoice is not paid?

Start with a friendly reminder, because a missed payment is far more often an oversight than a refusal. After that comes a final demand with a clear deadline, and only then a collection agency or legal action. The steps, including how to phrase the covering message, are set out in our guide on sending an invoice and following up on payment.

What your customer needs to process your invoice automatically

There is a side to invoicing that is easy to overlook: at the other end, your invoice goes into somebody’s accounts payable process. Increasingly that process is automated, and software reads your invoice instead of a person typing it over. How you build the invoice therefore decides how fast it clears their approval and how fast you are paid. A few things make the difference.

A readable file	A digital PDF, not a photo of a printout. Text that has been scanned from paper reads less reliably than text that was never printed.
Line-level detail	Description, quantity and unit price per line, with VAT rates split. That is what lets the recipient code each line to the right general ledger account.
Their reference	The purchase order or project code they asked for, in a fixed place. Without it, someone has to find out internally who ordered this.
Consistent layout	The same template each time. Recognition software and the people reviewing it both work faster on a format they have seen before.
A structured e-invoice	UBL over the Peppol network is the strongest option: the data arrives in named fields, so nothing has to be read off the page at all.

This is the side TriFact365 works on. It does not create or send sales invoices; it processes the purchase invoices that come in. The software reads the invoice, prepares a booking proposal with a general ledger account and VAT code per line, and once the recipient has checked and sent it through, the journal entry lands in their accounting package with the original document alongside it. So your invoicing software handles the outgoing side and TriFact365 the incoming side, and a well-built invoice is what makes that second half effortless. Read how the route from receipt to journal entry works, or see what receiving e-invoices over the network involves.

Frequently asked questions about making invoices

In closing

Making an invoice is not complicated, but it does need care. Work through the six steps so nothing mandatory goes missing, split your VAT rates per line, and build the invoice so the person receiving it can process it without picking up the phone. That is what gets you paid on time.