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In this tutorial, Sarah Banks explains how to create a basic invoice template in Microsoft Word. She begins with a blank document and highlights the importance of having a logo in the header, referring viewers to a previous video for instructions on inserting it. To start the invoice, she selects the preset "Heading 1" for the document's title. Key information to include in the invoice involves the recipient's name and address, along with a date and an invoice number. Sarah emphasizes the importance of these elements in the invoice creation process, guiding viewers through the foundational steps needed to set up their template.