How to Invoice for E-commerce and Product Sales

Product-based invoicing differs from service invoicing in a few important ways. Here's what to account for.

Include SKU or product codes

For businesses selling multiple products, including a product code or SKU alongside the description helps with inventory reconciliation on both sides.

Show shipping and handling separately

List shipping costs as their own line item, distinct from product prices, so the client can clearly see what they're paying for delivery.

Apply tax correctly on physical goods

Sales tax rules for physical products can differ from services, and may depend on the shipping destination — confirm your specific obligations by product type and region.

Reference order or tracking numbers

If applicable, include the original order number and shipment tracking number on the invoice for easy cross-referencing.

Note your returns policy

A brief reference to your return or exchange policy on the invoice or receipt helps set expectations, especially for first-time customers.

Consider volume-based invoicing for wholesale

For bulk or wholesale orders, itemize by product with quantity and unit price clearly shown, rather than a single lump total.