What is a Recurring Invoice: Details & Examples
January 06, 2023
If your business offers products or services to clients at regular intervals, creating a separate invoice for each transaction may be rather time-consuming and exhausting. For this reason, you should consider using recurring invoices.
These invoices can streamline your invoicing process and allow you to save a significant amount of time on paperwork. But what exactly are they, and what other benefits do they bring?
This article will provide you with all the necessary answers and show you how to make this important document with an online generator in a few simple steps!
So, without further ado, let’s get started!
What is a Recurring Invoice?
A recurring invoice is quite similar to a standard invoice, as it contains the description of your goods, payment terms, your and your client’s contact information, etc. However, the difference is that a recurring invoice is issued consistently—to the same customer in the same amounts.
You can send a recurring invoice weekly, biweekly, monthly, or bimonthly, depending on the agreement with your client. It doesn’t need to be altered since they are buying the same thing for you every time, so you don’t have to change the amount, the names of the products, services, or other details.
In fact, think of a recurring invoice as a document that’s routinely sent to the same recipient at regular intervals.
For example, if you send the same five items to a client every month, you can use recurring invoices for those items that you sell monthly. This way, you won’t need to create a new invoice every time you ship your goods. Instead, you can just reuse the same invoice you used the previous time and forward it to your client.
What Companies Use Recurring Invoices?
Recurring invoices are most suitable for businesses that offer goods at regular intervals, subscription services, etc. Some examples of such businesses include:
The best way to decide whether you should use recurring invoices is to ask yourself whether there’s a change in the products or services a specific client regularly contacts you for. If there’s none, it’s safe to assume your business could benefit from such an invoicing system.
What Information Goes on a Recurring Invoice?
Now that you know what a recurring invoice is and which businesses it’s most suitable for, let’s see what information goes on it!
#1. Contact Information
First and foremost, a recurring invoice must include your contact information, such as your name, phone number, street address, email address, etc. Then, you need to specify to whom the invoice is billed and add your client’s contact information, too.
For bonus points, you can also add your company’s logo here to make your business stand out.
#2. Invoice Number
Numbering your invoices is incredibly important if you don’t want to get lost in paperwork when filing taxes. You’ll likely need to collect your invoices from the fiscal year and fill out the W-2 form.
If you want to organize your recurring invoices like a pro, you should use numbers in sequential order and add the date next to them. So, for example, if you’re writing your first invoice for 2023, use "23001," in which “23” stands for the year and “001” stands for the invoice number.
#3. List of Products and Services
Next, you should add a list of the products or services you’re billing your client for. Be as specific as possible in this section and add a new line for every item, along with the number of items, the rate you’re charging for them, etc.
#4. Payment Terms
In this invoice section, you must specify how you’d like to get paid. Namely, include the payment options you accept, such as bank transfer, PayPal, credit cards, etc.
You should give your client as many payment options as possible so that they can choose the one that’s most convenient for them. By doing this, you minimize your chances of facing a late payment.
#5. Invoice Frequency
This is the most important section of a recurring invoice, in which you have to specify the starting date, number of occurrences, and invoice frequency. When filling out this section, you should consult with your client and see what works best for them.
#6. Additional Notes
Last but not least, you can use the “Additional Notes” section to write down any details you deem necessary to the recurring deal you have with your client.
If you don’t think there is anything worthy of mention, add a simple “Thank you” note, which will give your invoice a warmer tone.
Advantages and Disadvantages of Recurring Invoices
Can’t decide whether to use recurring invoices or not? Check out some of the benefits of this invoicing system, such as:
- Improved cash flow. Recurring invoices assure a steady stream of monthly income and can help you set a realistic budget based on your cash flow projections.
- Automated payment process. Once you make a recurring invoice, you can set a schedule for sending it on time whenever you agree with your client.
- Faster payments. Clients are more likely to pay you faster when they know how much and when they are due to pay you every week or month.
- Convenient invoicing system. Using recurring invoices saves time, as you don’t have to create a fresh invoice every time you want to bill your client.
- Improved client relationships. Recurring invoices build recurring relationships with your clients, especially if you’re issuing them for a long-term deal.
Even though recurring invoices have plenty of benefits, they also have their disadvantages. The biggest drawback of recurring invoicing is that it’s harder to trace any human errors that might come up when you’re making an invoice.
Yet, this problem can easily be solved if you use an online generator. With it, you’ll minimize the chances of making any mistakes in your invoice, as you’ll only have to fill out a pre-written template.
How to Create Recurring Invoices with an Online Generator Hassle-Free
Creating a recurring invoice is super simple if you use the appropriate software. However, using programs like Word or Excel to make this important document often entails various types of errors and is usually rather time-consuming, too. Due to this, you should use an online invoice generator just to be on the safe side.
An online invoice generator is quite easy to use, and on top of that, it saves you a lot of time, as you only have to fill out a template to get an invoice. Here’s how it works:
- Visit our invoice template generator
- Fill in the blank fields
- Review your document
Once you’re done, you can instantly download your invoice and forward it to your client via email in PDF form or print it out and mail it to them.
Other Types of Invoices
Besides a recurring invoice, you can also use our online generator to create some other invoices, such as:
This invoice type is primarily used by construction companies, and it specifies the services they’ve provided their clients with, their prices, and other important details.
A sundry invoice is an invoice that’s issued by companies to clients who rarely need credit and whose amount of purchase is not significant.
Also known as a credit memo or credit note, a credit invoice includes refund details.
With an advance invoice, you can ask for payment from your client before delivering your products or services.
As its name suggests, a photography invoice is used by photographers when they want to bill their clients for specific services.
A digital invoice is usually in a PDF format, and it allows for a streamlined payment process.
Primarily used by independent performers, this type of invoice contains payment details regarding the acting project.
Invoices for cleaning services are used by independent cleaners, break down the services they provide, and state the price of these.
These invoices are used by contractors who are independent of a company’s payroll system and are self-employed.
- A recurring invoice is a type of invoice that’s sent to the same customer, in the same amounts, on a regular basis.
- The businesses that benefit most from recurring invoices are the ones that offer services or products at consistent intervals.
- Usually, a recurring invoice includes your and your client’s contact information, a list of products and services, payment terms, and invoice frequency details.
- Recurring invoices are beneficial because they improve cash flow, improve client relationships, and can speed up payment times.
- The only downside of recurring invoices is that it’s hard to trace any human errors, but this problem can be easily solved by using an online invoice generator.
Hopefully, this article has provided you with a crystal clear picture of what recurring invoices are and helped you conclude whether you should implement them or not.
However, if you decide to use recurring invoices, use our online generator to create these important documents and turn your invoicing process into a breeze. Besides invoices, we can also generate customized pay stubs and 1099-MISC forms for you.