An invoice is a document that contains a list of goods and services a specific customer ordered and subsequently received from a business, along with their corresponding quantity and costs.

Its primary purpose is to streamline the transaction by providing valuable information such as the total amount of money the customer owes and a brief description of the products and services rendered.

It may also serve as a legally-binding document against customers who don't pay for the invoice as well as against vendors who charge more money than what was indicated in the invoice.

For these reasons, it's advisable to write up an invoice for every transaction you make. It can take much of your time, but that's why using a template is always ideal. If you plan to use a template, you should start with a free Excel invoice template. Here are four reasons why.

Pros Of Free Excel Invoice Template

Pro #1: Excel Offers A Wide Range Of Invoice Templates

Unbeknownst to many, invoices come in different forms, with each type having different formats and containing varying details. Naturally, if you want to send an invoice that isn't the standard version, you'll need a template specifically designed for such use.

Fortunately, Excel offers an assortment of invoice templates to its users. Here's a look at some examples of such templates.

• Of course, Excel would have a template for standard invoices, which is basically the vanilla version of an invoice. It contains all the basic details an invoice should have.
• A credit memo template is an invoice that you'd issue to a client if you owe them money, perhaps because of a refund, discount, or a miscalculation on your part.
• A debit note template is basically the opposite of a credit memo. It's when the client owes you more money than what was initially calculated.
• If you deliver goods internationally, a commercial invoice would be the type of invoice you'll want to use. It includes details that influence the price of your goods when it comes to international delivery, such as the package's weight and volume, and packaging type.
• As the name implies, a timesheet is an invoice that shows how the cost of time-dependent jobs is calculated. It contains details like the hourly rate and hours worked. Employees often use it to seek payment from their employers, though businesses such as law firms and real estate agents also use timesheets to collect payments from their clients.

Depending on your business, you may have to use different types of invoices. This flexibility or versatility is one of the most significant advantages of Excel over other invoicing software.

Pro #2: Excel Itself Is Cheap

To obtain full access to Excel, one only needs to pay around USD$149 for the entire Microsoft Suite license. This includes other software such as Word, PowerPoint, Publisher, and more.

Once you pay this amount, you can use the software as much as you like—it's essentially a one-time fee. Besides, you likely already have a license on Microsoft Suite, so it's essentially free.

On the other hand, if you choose to use invoicing software, you'll have to pay as low as USD$100 and as high as USD$800 a month, depending on the provider and the number of users. Granted, there’s free invoicing software out there, but it’s often lackluster.

So, objectively speaking, using free Excel invoice templates is much cheaper than using templates from advanced or specialized invoicing software. Sure, price isn't the only factor when choosing software. But one must remember that Excel is quite a powerful tool.

Pro #3: You Can Incorporate Useful Formulas

Excel is known for its functions and formulas. And as you might imagine, an invoice—a type of document that relies heavily on calculations, would benefit a lot from this specific feature.

For example, when you need to charge Value-Added Tax (VAT) to your customers, these formulas come in handy. For your information, VAT is a fee expressed as a percentage of the total cost.

Traditionally, when writing up an invoice, you must calculate the VAT for a customer's purchase manually after summing up and getting the total. However, with Excel's formulas, you can very easily automate this process, which, in turn, will save both you and your customer a lot of time. Speaking of automation, there's yet another way to automate specific tasks with Excel.

Pro #4: Automation Is Possible

If your business primarily deals with physical goods, Excel's database functionality would most likely help a lot. By storing all the information on each product, you can save yourself a lot of time when creating an invoice. For example, you can create a database within Excel's invoice templates that consist of a list of your products and their corresponding costs.

By doing so, rather than typing in the product name and its cost on an invoice, you only have to type in the name. Other details corresponding to that item will automatically populate the invoice.

Cons Of Free Excel Invoice Template

Con #1: You Can Only Send The Invoice Via Email

Most invoicing tools nowadays allow you to send the invoice via fax or online, but that isn't the case with Excel. If you want to use free Excel invoice templates, expect that you can only send the invoice via email. This may mean longer payment times since your customers would have to navigate to payment gateways manually.

Con #2: The Platform Is Not So Secure

Excel was originally designed to help with calculations and mathematical functions. That's why, compared to other invoicing software, the platform isn't the most secure. For that reason, hackers can very easily access your invoice records.

On the bright side, you can always disconnect your Excel from the internet, though that would limit your use of the platform.

Con #3: Excel Isn't Suitable For Mobile Devices

While Microsoft Excel does come as a mobile app, it isn't necessarily as capable as its desktop version. This makes on-the-go invoicing a lot harder, as opposed to other invoicing software.

Final Words

Excel may not be the best tool for invoicing, but it does have its merits. It's easy to use, consists of several templates, and has numerous useful functionalities. Sure, it has some downsides, such as poor security, accessibility, and only one delivery option, but it's a worthwhile tool nonetheless, especially for a rather cheap platform.