What Should an Advance Invoice Include?
Derived from Stripe’s guidance, an advance invoice must contain the following essential elements:
Basic Components:
Invoice Number – a unique identifier for tracking.
Issue Date – the date when the invoice is created.
Seller details: Business name or personal name, address, VAT registration number (if applicable).
Buyer details: Business name or personal name, address, VAT registration number (if applicable)
Product or Service Description – clear detail on what the advance covers (e.g., “initial deposit for 50 custom chairs, including labor and materials”).
Advanced Components:
Quantity and Unit Price – a breakdown of the advance amount (e.g., hourly rate, number of units).
Sales Tax or Applicable Charges – if VAT or other charges apply, they should be clearly listed.
Payment Terms – specify whether it is partial or full payment, due dates, and any late fees.
When & Why It’s Used
What is advance invoicing?
Advance invoicing is the practice of issuing an invoice for payment before delivery of a product or service. It secures upfront funds, especially useful for custom orders or projects requiring preparation expenses.
Benefits include:
Better financial predictability – lets you cover early costs like materials or labor.
Clear commitments – helps formalize the agreement and reduce cancellations or no-shows.
Momentum and priority – receiving payment can motivate both parties to proceed with confidence.
Industries that commonly use advance invoicing:
Event planning (e.g., venue booking, catering).
Construction and contracting.
Custom manufacturing (e.g., bespoke furniture).
Freelancers working on a project basis