An advance invoice is issued before goods or services are delivered, requesting either partial or full payment upfront. It should be detailed and transparent—outlining what the client is paying for, the amount, delivery expectations and payment terms.
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