How to send an invoice to a wholesale or custom-order customer

How to send an invoice, step by step

These steps work the same way for a shop selling to a wholesale buyer and for a maker billing a custom order. The tool you use changes only the last two steps.

1. Agree on the order first

   Confirm the items, quantities, prices, shipping and the payment terms with the customer in writing before you invoice. The invoice should match what they agreed to, so it does not start a dispute.

2. Fill in the invoice

   Add your business name and contact details, the customer's name and billing address, a new invoice number, the issue date, each line item with quantity and price, shipping, any sales tax, the total and the due date.

3. Choose how the customer pays

   Decide which payment methods to accept. A card is quick for the customer, while a bank payment costs you less on a large order: on PayPal, Pay by Bank costs 1% (capped at $10.00 per transaction) against 2.99% + $0.49 per transaction by card.

4. Send it

   Send the invoice from your invoicing tool by email or as a link, or attach a PDF to an email. Keep a copy, because invoices are among the supporting documents the IRS names: sales slips, paid bills, invoices, receipts, deposit slips, and canceled checks.

5. Follow up and record the payment

   Check the due date, send a reminder if it passes, and mark the invoice paid when the money arrives. Note the payment date and amount next to the invoice number in your books.

What to include on an invoice

No federal form tells a small business what an invoice must look like. The IRS asks for records instead: you should keep supporting documents that show the amounts and sources of your gross receipts, and its list of supporting documents includes sales slips, paid bills, invoices, receipts, deposit slips, and canceled checks. An invoice that carries the fields below gives you that record and gives your customer what their own bookkeeper needs.

Some wholesale buyers have their own invoice requirements, such as a purchase order number on every invoice or a specific billing email. Ask for them before the first order, because an invoice that is missing them can be sent back or held.

Sales tax rules vary by state. In California, for example, the CDTFA says that when a seller accepts a valid resale certificate in good faith, the seller does not owe tax on that sale. Check your own state's revenue department before you leave tax off a wholesale invoice. This page is general information, not legal or tax advice.

How to number invoices

Give every invoice its own number and never reuse one, even when an invoice is cancelled. Mark a cancelled invoice void and keep it, so the sequence has no unexplained gaps when you or a tax preparer review your books.

Any system works if it is unique and in order. If your invoicing tool numbers invoices for you, keep its sequence; if you number them by hand, pick one format and keep it.

• Sequential: each invoice is the previous number plus one. It is the simplest and the easiest to check for gaps.
• Year prefix: the year, then a sequence that restarts each year. It matches the IRS suggestion to organize records by year and type of income or expense.
• Customer prefix: a short code for a wholesale account, then a sequence. It helps when one buyer orders often and asks about a past invoice.

Payment terms and deposits for wholesale and custom orders

Payment terms tell the customer when the invoice is due. A one-off customer may pay on receipt, while a wholesale buyer may ask for a set number of days after the invoice date. Write the term on the invoice together with a calendar due date. Agree on the term before the order ships, and put any late fee in writing at the same time.

Custom orders carry more risk, because you buy materials and spend time on something you cannot sell to anyone else. A deposit before you start, with the balance invoiced before delivery, limits that risk. Send the deposit as its own invoice, then show the deposit as a credit on the final invoice, so the customer sees what they still owe.

When you count the income depends on your accounting method. Under the cash method, you report income in the tax year you receive it. Under an accrual method, you generally report income in the tax year you earn it, even though you may receive payment in a later year. A deposit received in December for a January delivery can land in different tax years depending on the method, so ask a tax professional if your deposits cross the year end.

How to send an invoice on PayPal

PayPal says all you need is a PayPal account: Creating and sending invoices is included with your account. Create an invoice from the Invoicing section of the website or app, add the customer's email, your line items and a due date, and send it. PayPal says invoices can be sent by email, SMS, messaging apps, and social media, and your customer doesn’t need an account with PayPal to pay.

PayPal charges when the customer pays. A card payment on an invoice costs 2.99% + $0.49 per transaction, a payment from PayPal or Venmo costs 3.49% + $0.49 per transaction, and Pay by Bank costs 1% (capped at $10.00 per transaction). A payment from another country costs the domestic rate plus the additional percentage-based fee for international invoicing transactions.

How to send an invoice on Square

On the Square Free plan the monthly fee is $0/mo. per location. Create an invoice in the Square Dashboard or app, add the customer and items, set the due date and send it. Square says invoices go out by email, SMS, or a shareable link.

Square has two features for custom orders paid in parts. Deposits: you can request a deposit and Set a separate due date for the remaining balance. Payment schedules: Schedule multiple payments for any job on a single invoice. Automatic reminders can go out before, on, or after the due date.

On Square Free, a card payment on an invoice costs 3.3% + 30¢ and an ACH bank transfer costs 1%, $1 min.

How to send an invoice on Stripe

Stripe Invoicing runs from the Stripe Dashboard, with no code required. Add a customer, add line items, set the due date and send. Stripe says you can email your customers a PDF invoice or a link to a Stripe-hosted invoice page.

Stripe charges twice on a paid invoice. Stripe Invoicing has no fixed fees or setup costs. The Invoicing Starter plan costs 0.4% per paid invoice and Plus costs 0.5% per paid invoice; on top of that, Stripe Payments pricing will apply, which for a US card is 2.9% + 30¢. ACH Direct Debit costs 0.8%, $5.00 cap.

What each tool charges on one invoice paid by card

Example: a $500 wholesale order, invoiced once and paid in full by a US card. Each tool uses its own published invoice rate.

Keep a copy of every invoice you send

The IRS says to keep supporting documents because they support the entries in your books and on your tax return. Your invoicing tool keeps a list of what you send, but export or download a copy at least once a year, so your records do not depend on one account staying open.

Keep paid, unpaid and void invoices together in number order. If a buyer pays several invoices in one transfer, note which invoice numbers the payment covered, so each sale can be matched to a deposit in your bank account. Recordkeeping rules for state taxes vary by state, and this page is general information, not legal or tax advice.

Where Nation fits

Questions about sending invoices