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February 9, 2021
A detailed invoice system can help you keep a record of your business transactions, file taxes and settle business claims. To keep income flowing, every business needs to generate and send out invoices, but sometimes this task falls to the bottom of the to-do list as entrepreneurs get busy handling other aspects of their business. Check out some of the best practices to ensure that invoices go out on time and are accurate and complete, so payments come through swiftly.
Whether you choose to create an invoice on your computer or by using an app, you must include the following information for a complete invoice.
style="margin-top: 12pt; margin-right: 0in; margin-bottom: 12pt; padding-left: 0in;">Label the invoice at the top and name it, so your customer knows what it is about when they open it. Also, ensure that your invoice includes your logo in the header.
style="margin-top: 12pt; margin-right: 0in; margin-bottom: 12pt; padding-left: 0in;">Mention an invoice number and unique identifier (project name or number) to separate a particular invoice from every other invoice you send. Numbering invoices will make it much easier for both you and your customers to search or track payments related to it.
style="margin-top: 12pt; margin-right: 0in; margin-bottom: 12pt; padding-left: 0in;">Make sure all of your information is listed correctly in your invoice. Always include your business' legal name, email, physical address and phone number in your invoice. You can fill in all of that information quickly with a pre-designed template available in your invoicing software. With this information readily available, your customers can contact you in case of any questions.
style="margin-top: 12pt; margin-right: 0in; margin-bottom: 12pt; padding-left: 0in;">Including issue and invoice dates can help you check and confirm dates of services or product shipments whenever Necessary.
Make sure to list details of the product or service delivered as a separate line item, so your customers know what they're paying for. You can include the following details in your invoice:
style="margin-top: 12pt; margin-right: 0in; margin-bottom: 12pt; padding-left: 0in;">Write a brief note at the end of the invoice to thank your customers for their business. You can also use the message field to mention a project if you did something unique for the client.
State the total amount of money due on your invoice, with all taxes included. Make it bold and a little larger than the other text to highlight. Also, mention the available payment methods and your bank details so your customer knows how they can pay you most conveniently.
style="margin-top: 12pt; margin-right: 0in; margin-bottom: 12pt; padding-left: 0in;">Specify the payment terms on your invoice, along with late payment and fee details if customers do not meet the terms. Including the due date on your invoice informs your customers about the time to make the payment and the new total they will owe if they pay after the due date.
To send the invoice to the right person, make sure you list the customer’s name, title and contact information, such as their email, billing address, phone numbers and physical address correctly.
class="””" />Ensuring that your invoices are professional and complete is critical to your success and ensures positive cash flow for your business. Here are a few more reasons why invoices need to be accurate.
– Companies typically don’t make payments until they receive invoices for goods and services delivered. Preparing and sending accurate invoices promptly after a sale can help you get paid or collect payments on time. Setting up recurring billing for repeat customers can further speed up the process.
– Invoices can serve as legally binding agreements between a business and its clients, thus protecting businesses from lawsuits. Invoices allow you to keep a record of the products or services delivered, money owed and details of the companies involved.
– Records of your invoices can help you identify peak times when your products or services were in demand, and the most and least popular products or services you offer. Once you analyze such trends in your business, you can develop marketing strategies based on these trends to grow your business.
– Invoices can help businesses record and track their sales and manage their cash flow. They can also help you determine the average amount of time it takes you to receive payment from your client, the status of payment and the dates when transactions happened.
– Invoices provide valuable data regarding how your sales change over time that you can use to create accurate business forecasts. You can use invoices to determine the goods or services with the highest sales volume and those that bring in the highest revenue. Invoices can also help you identify the top-performing sales employees and the profit they bring.
– Your invoices provide documentation that can help you file taxes or even carry out an internal audit. Moreover, invoices also make it easy to claim tax refunds.
The better your billing practices are, the fewer questions your customers will have about their bills. Here we've listed 12 best practices to ensure that your invoices go out on time and you receive the payments in a timely manner.
style="margin-top: 12pt; margin-right: 0in; margin-bottom: 12pt; padding-left: 0in;">Always provide your clients with various payment methods to speed up the payment process. The more options your clients have to pay, the more likely they will pay you early. Always include the information about accepted payment methods on your invoice.
style="margin-top: 12pt; margin-right: 0in; margin-bottom: 12pt; padding-left: 0in;">Sometimes clients take a while to pay you, which can be irritating. However, it’s essential to remain professional and follow up with customers so you get paid faster. Send your customers a friendly reminder via text or email, or reach out to them via a call to ensure they’ve received the invoice and will pay you soon. Always speak directly to the person in the company who is in charge of managing the finances and has the authority to make payments.
Offer a discount to your customers on the total amount of the invoice or a future purchase if they pay early or before the due date. You can also offer them a referral incentive for recommending your company to their friends.
You should thank your customers for their timely payments, let them know you appreciate their business, and tell them you will be there in case of any questions or concerns. This polite final touch can make a positive and lasting impression on your clients, and they may consider your company when it comes to buy other items or services.
By ensuring that each invoice contains the right information and sending it to the right person, you can receive payments on time. Always include an invoice date, an invoice number for tracking inventory and your business’ progress, the total amount due, due date and the right billing address in your invoice. Also, provide any information that your customer may require to process the payment request, such as purchase orders or approved timesheets.
Using an electronic invoicing system allows you to create and send bills electronically. With invoicing software, you can send invoices and payment reminders automatically in a timely, consistent manner. Most invoicing software systems also back up and store your invoices on the cloud, thus making them easy to retrieve. They also allow you to save descriptions of different products or services and quickly include them on the invoice. Thus, you can save time and increase the invoice accuracy by auto-filling the information in an invoice.
Staying in constant contact with your buyer can help you identify how they pay their bills and the right person to reach out in case of any delay. Consider the following three things when contacting your buyer for payments:
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