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PayPal is a leading payment platform for small to midsized businesses and it offers one of the best free invoicing tools. It enables you to easily create invoices and get paid quickly with prebuilt invoice templates, online payments, and features such as payment reminders. Learning how to create an invoice in PayPal is simple. To start, create an account, choose an invoice template, add your info, enter customer details and services rendered, and click send.
In this guide, you’ll learn how to make an invoice on PayPal in just a few steps. We’ll walk you through the process and important considerations so you can start getting paid.
1. Register For An Account And Log In
The first step in creating an invoice is to create and log in to your PayPal business account. If you still have a personal account, you can change it to a business account. To do so, open your profile settings and choose the “Convert to a business account” option in the “Account” tab. You need to fill in details about your business and then confirm.
After you complete the account activation steps sent to your email to activate the business account, you can start invoicing your clients immediately.
2. Create Your First Paypal Invoice
After logging in to your PayPal dashboard, find and click “Tools” in the top bar and then click “Invoicing.” Next, click the “Create invoice” option.
Select a Template
Choose a template and currency from the drop-down list at the top of the invoice. If the default template works for you, continue with it.
Change Currency (Optional)
The default currency is USD. However, here you can change it should you want to use a different currency for your invoice.
Add Business Details
Before proceeding, add these business details to be included in the invoice:
- Company name
- Company logo
- Your first and last name
- Email address
- Contact number
- Website address
- Tax ID
Some of these, such as logo, website address and contact number, are optional. So you may choose to omit these details.
3. Add Customer Email and Details
Next, you need to fill out customer details. The only mandatory field is the customer email address, however you should also minimally complete fields such as customer name, address and contact information.
The following are the optional fields:
- First and last name
- Business name
- Address
- Contact info
- Country
- Delivery address
- Billing address
- Additional notes
If you plan to continue working with the client, save the details to make future invoicing faster.
4. Enter Products or Services Rendered
Every invoice should include a brief description of the products purchased or services rendered. In some instances, you may also want to include an itemized list to further break down all associated costs.
Add the following information to your invoice:
- Item
- Quantity
- Price (the invoice subtotal will automatically update)
- Tax (default is no tax)
- Description (optional)
If you want to add tax, click on the drop-down box and select “Add tax.” A dialog box will pop up and you will need to enter the tax name and its rate. When you move away from the row, the total amount will be calculated automatically for the row. Repeat this for every item on the list.
Additionally, you may want to complete the optional fields, which include a message to the customer, terms and conditions (recommended), an invoice reference number, any relevant uploads or attachments (e.g., contracts or agreements), and a memo to yourself which is not visible to the recipient.
5. Invoice Number and Dates
PayPal gives a default number to your invoice but it is advisable to use a customized invoice number that you can use for filing purposes.
Include the following two dates on your invoice:
- Invoice date. The invoice date defaults to the date when you are creating the invoice but you can use a backdate or a future date. In case of a future date, the invoice is saved and scheduled to be sent on the selected date.
- Date of services rendered: Include the date on which you sold products or rendered services.
- Due date. By default, the due date of the invoice is “On receipt” but you can choose to be paid within 10, 15, 30, 45, 60 or 90 days. You can also give a specific date or no due date at all. It’s totally up to you when you want to get paid.
To help ensure your invoice gets paid, PayPal enables you to set up payment reminders. This will automatically send your customers an email at certain times to remind them of their upcoming payment due date. To do this, go to “manage invoices” from your account dashboard and select the “unpaid” tab. Next, select invoices and click the “remind” option.
6. Add Discounts and Shipping (Optional)
Finally, add discounts if you are providing any, as well as any shipping charges (if applicable). As you add any discounts and shipping information, the total payable amount will automatically be recalculated.
7. Preview and Send
Before sending the invoice, preview how it will appear to the client and make changes if required. It’s always worth taking a couple of minutes to review and double-check your invoice before hitting send. For example, check for silly grammatical errors and spelling mistakes, as well as customer name and contact info, services rendered, and pricing to ensure everything is correct.
Lastly, when it’s ready to go, click on the big blue “Send” button at the top right to send it to the client’s email.
Getting Paid and Next Steps
After sending the invoice, you can edit, delete or archive it. Since your client has a dynamic link to the invoice, any changes you make will be available to the customer. After the payment is received, PayPal will automatically transfer the amount to your linked bank account, after deducting the transaction fees.
If the client doesn’t pay on time, you can follow up through the PayPal dashboard itself. And if the client pays outside of PayPal, you can manually record the transaction.
For regular clients, you can set up recurring invoices to be sent on fixed dates.
Frequently Asked Questions
Are PayPal invoices free?
Creating invoices on PayPal is free. You pay a transaction fee only when you receive the payment. You can check the latest rates here.
How do I get paid on PayPal?
To get paid through PayPal, create an invoice using its invoicing tool, share the invoice link with the client and get paid. The invoice includes a “Pay Now” button with multiple options to pay.
What are PayPal invoicing alternatives?
FreshBooks, QuickBooks, Odoo, Marketing 360, Zoho and Chargebee are some of the alternatives to using PayPal invoicing software.
What are some benefits of billing software?
Using billing software helps to eliminate some or all potential human errors by automating several processes that are normally done manually. This also saves time. Automated billing, invoicing and other processes also help improve project and client management. Your billing and invoicing processes are also more streamlined and bills are processed and sent out in a timely manner.