How to create a holiday rental invoice

Booking contracts and invoices

There are actually two important documents you should prepare for your guests. A booking contract lays out the terms and conditions of your rental agreement, while an invoice serves as a bill. Your invoice should contain an itemised list of the things your guests are paying for, broken down neatly. A holiday rental invoice should always be very clear. Guests may try to dispute an invoice if they don’t understand it.

The holiday rental portal that you use may offer its own system of booking contracts and invoices. If that’s the case, make sure you check carefully and ensure it fits your needs. Be aware that some platforms give hosts limited control over their own contracts. That tends to be especially true if you have certain rules; for example, you may want to apply a surcharge if your guests are bringing more than one dog. Your chosen platform may or may not allow you to do this.

Your booking contract needs to clearly explain your terms and conditions. In particular, it should highlight circumstances that may cause your guests to lose part or all of their deposit. A booking contract is a legal document, but be careful. It’s only considered legally binding if it’s reasonable, and that’s up to the courts to decide. If you try to add unreasonable, ridiculous clauses in the hope of holding onto more deposits, you could find yourself facing legal and financial consequences.

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What needs to be in your invoice?

An invoice is an important financial document, and everything needs to be above board. Before someone comes to rent your holiday apartment, be prepared to create an invoice. Here’s the information it needs to contain:

• Your company name: ‘Rent my holiday home’ isn’t good enough. You should have an official name and proper letterhead if you want to look more professional.
• The invoice number: You’ll need this for your own record-keeping.
• The lead guest’s full name: You don’t need to include the names of all the guests, but you should have the necessary information about the lead guest.
• Dates: The date of arrival and departure.
• The number of nights: Yes, people can work this out from the arrival and departure dates, but for the sake of clarity, spell it out.
• The cost per night: If different nights have different costs, you should make this clear.
• Subtotal: The cost without tax.
• Taxes: The amount of tax.
• Grand total: The total amount to be paid, including tax.

Those are the basics for a legal invoice. However, you may also need to add extras, depending on the services your guest has requested. These could include, for example:

• Late checkout
• Laundry services
• Breakfast or other food
• An extra bed or bedding
• A cot
• Surcharges (for example, if the guest is hosting a party or is a member of a large group)

If you’re offering any kind of discount or special deal to your guests, that should also be included. In this case, you’ll want to show lines listing the total before tax, then the discount, then the total with tax applied.

Making sure your invoice is clear

Clarity is one of the most important things when it comes to holiday rental arrangements. If your guests don’t understand something on the invoice, they might well quibble. To avoid any issues or drama, keep things clear and simple from the start.

One example here is different prices for different nights. For instance, many rental cottage owners set one price for Friday and Saturday nights and another for Sunday to Thursday. What can you do if someone books your cottage for three nights: Wednesday, Thursday and Friday?

The answer is to list two separate items on the invoice. You could call one “peak night” and the other “off-peak night”. For even more clarity, make sure you’ve mentioned the dates of the guest’s stay. For example, your holiday rental invoice might look something like this:

Off-peak nights x 2 (26 June, 27 June)………………….£60…………………£120

Peak night x 1 (28 June)……………………………………..£80…………………£80

This kind of simple breakdown ensures that anyone who looks at the invoice can understand it at a glance. That’s important for you and your guests, but it’s also essential if you need to speak to a tax officer or financial advisor further down the line.

Making your invoice look good

When you start out in the holiday rental industry, you might not feel particularly professional, but your invoices should still look the part. There are plenty of holiday rental invoice templates available online that you might want to adapt. Make them your own by placing your logo in the corner or changing the colour scheme to suit you. Don’t go too crazy with your artistic side. Remember, an invoice is ultimately a legal financial document, and you want it to be clear. Wacky fonts or garish colours are not helpful. It’s a good idea to keep the final total in bold.

If you’re feeling creative, you can also make your own invoices. The most important part of the invoice is the table listing items and prices, which you can easily create in Microsoft Excel or a similar spreadsheet program. Let the software crunch the numbers for you — making a mistake in an invoice can be embarrassing, and eagle-eyed guests are sure to spot it.

Updating your invoice

Most holiday rentals ask guests to pay a deposit in advance, with the balance due at a later date. In this case, you’ll want your invoice to reflect that. At the bottom of your numbers, under the final total, add a line showing that the deposit has been paid. Then you’ll need one final line listing the total balance now due.

When you email your invoice to your guest, mention the deadline for the final payment. Give them at least a few days’ notice — the more, the better — and be firm but not demanding.

You may also need to update your invoice again while your guests are staying, especially if they add any extras without warning, such as late checkout or an additional night. Make sure the updated invoice always shows how much they have paid so far, along with how much they owe. Keep copies for your records, as you’ll need them when it’s time to go through your business taxes.

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