We all like to get paid but if your invoicing is not up to scratch, it could take a lot longer to be paid than you hope.
All too often you receive an invoice which leaves you scratching your head, maybe too much information making it hard to work out the widget from the gadget or not enough information to tell you what you are actually paying for.
Professional looking documentation is also a good reflection on your business and how you conduct your business and invoices are no exception. You take time to have brochures, business cards and website which are easy to read and appealing to the reader so don’t forget the invoice. It is probably one of the most important documents you issue, for more than one reason!
Your invoice should look like the rest of your business documents with fonts, colours and a logo which matches, it is all part of your business branding and what people remember.
The recipient’s details should be placed clearly at the top, with a reference and invoice number also at the top. If the customer needs to query the invoice they don’t have to hunt for the information. The date of the invoice and the required payment due date should also occupy a prime spot, it saves any discussion later.
If you are starting up, don’t start your invoice numbering with 1, be optimistic add a few zeroes in front – 00001 – it gives you room to grow and it looks more impressive.
If at all possible keep the invoice to one page, unless of course you need to detail all the supplies with cost per item, number of items and total cost. If this is something you need to do, consider having one page with major headings form the invoice and a separate stock sheet to tick off all the items.
If you provide a service rather than product and you charge by the hour, always show the hourly rate, number of hours and total line cost. Including a time sheet as a second page showing the when, what and how long will be proof of work and could circumvent any queries. If you sign an agreement with your customer for the services you provide and it is the first or final invoice, include the fee information or Schedule page which outlines what the customer signed up for.
Very important – show the payment options clearly. This ideally should follow the total amount payable, it is a natural progression, not only for the eye but the mind. If Electronic Funds Transfer is an option, make sure your bank details are obvious.
Ensure the terms and conditions of the invoice are shown e.g. payment terms are 30 days; late payment fees will apply; legal action to be taken for non-payment………. if a customer is in default you have covered yourself.
Of course don’t forget your company contact details, this is also a chance for marketing so show your website and or Facebook links, make sure you include a hyperlink if sending these online, so the customer can click through to the site. If using traditional post, make sure you always have a copy and if sending online, always save it as a PDF, it is then a secure document and has an electronic footprint.
In Australia you must show your ABN on the invoice, this can go alongside the contact details.
When establishing the working relationship with a new customer, always make it clear at the beginning what your invoicing terms are. If this is a one-off job, at least for now, and you require a deposit, milestones and full payment on completion of the work, state that up-front. If this is ongoing, then state whether terms are weekly, monthly and when payment is due.
None of us like unexpected surprises, especially when it comes to payments and it is good for everyone’s cash flow to know these things.
If your accounting system doesn’t leave much room for customisation, get a new system! Or export data to an Excel template where you will have the freedom to dress it up and impress.
This is the digital age, so check out the online options, there are many and something should surely suit.