10 Common Invoicing Mistakes Small Businesses Should Avoid
Invoice Calculations Invoice and quotation totals become much easier to understand when you calculate them in a clear order. Start with line items, build the subtotal, apply the agreed discount, calculate tax according to the rules that apply to you, then add any clearly stated extra charges. Start with the line items Every total begins with the products or services being sold. For each line, multiply the quantity by the rate or unit price. If you sell three units at $40 each, the line amount is $120. If you bill 5 hours at $80 per hour, the line amount is $400. Add all line amounts together to produce the subtotal. The subtotal is the value of the listed items before the later adjustments shown on the document, depending on how your tax system defines the taxable amount. Example of a basic subtotal Description Qty Rate Amount Design service 2 $150 $300 Content editing 3 $80 $240 Subtotal $540 At this stage, the arithmetic is straightforward: $300 plus $240 equals a $540 ...