As a business owner, issuing invoices to your clients or business partners will inevitably always be part of your routine. An invoice is a document that consists of a list of purchased products or services rendered to the buyer. It usually includes your business name, the client’s name, description and prices of the services or products, as well as the acceptable modes of payment. But sometimes, due to its prevalence, many business owners fail or forget to realize the importance of invoicing and how it can impact their business, especially when done ineffectively.
Why is invoicing important?
The fundamental purpose of an invoice is to ensure your buyers will pay you promptly. The invoice will serve as a sales agreement between you and your client, in which the buyer should pay the stated total cost within the invoice due date. In case of potential fraudulent lawsuits, the invoice will protect the merchant since it can serve as legal proof that the seller and buyer had agreed on the set price.
Creating invoices will also help you keep track of your sales and manage your finances better, while at the same time, your buyers can easily monitor their pending payments. Furthermore, you can gather valuable data regarding your daily, weekly, or monthly sales and eventually help you formulate accurate sales forecasts through your invoices. You can also overview your clients’ buying patterns, average payment timeline, most popular products sold, and other details that could help you develop effective marketing strategies.
Thankfully invoicing software similar to that offered by Jobber is available to help businesses streamline their invoicing process, allowing them to easily send accurate invoices to their clients. Regardless of which industry you belong to––may it be a plumbing, commercial, or landscaping business––investing in invoicing software will help smoothen your daily business operations.
How to do invoicing properly?
Keep in mind that your invoice should make it convenient for your clients to pay their bills. Otherwise, messy invoices will only make your business look unprofessional and leave your clients perplexed about how and what they’re paying for.
Here are some invoicing best practices to help you create professional invoices properly:
- Personalize the invoice
Giving out invoices that appear similar to others might make yours unrecognizable and easily forgotten. If you’re using an invoicing app, you can customize your invoice to ensure it fits the type of business you have. You can personalize it by adding your color scheme, tagline, and business logo. These things may not be necessary, but a personalized invoice will make it more distinguishable, memorable, and help you get paid more promptly.
- Come up with a professional invoice layout
A professional invoice layout can also boost your business’s authority and credibility, increasing the likelihood of getting paid. This is important since fake invoice scams are becoming more prevalent nowadays. Preferably, your business name and logo must be at the topmost part of the page in large fonts. Then, you can place your address and contact details in smaller fonts below the logo. This way, your clients can contact you easily in case they have any questions.
Having incomplete contact details could potentially hold up clients’ payments, especially if they have concerns regarding the invoice. Depending on your preferences, you may also refer to the pre-built layout from your invoicing software and customize the font sizes.
- Include the customer details
Typically, the customer’s details like their name, mailing address, contact numbers, and email address should be included within the context. This ensures that you’re billing the payments to the right client.
Furthermore, you should also assign an identifier or invoice number for every invoice you issue. This will keep your records more organized and easily identifiable in case the client forgets to pay one of their invoices. An invoice number is usually issued automatically by your invoicing software.
- Incorporate the invoice due date and payment terms
Many businesses often fail to include the invoice due date, which is why some clients can easily make up excuses for delaying their payments. Hence, add an invoice due date and payment terms to make it clear to your buyers how long they can pay.
In most cases, some businesses provide 30 days as the default term, while some may go for 14 days or even payment upon receiving the issued invoice. Moreover, you must also state the payment terms that tell how much you should charge for late payments.
- Include descriptions of goods or services
Putting the descriptions of the goods or services will help clients know what they’re actually paying for. Otherwise, placing only the product’s name will leave them confused and further delay their payments.
- Add your payment options
To complete your invoice, add the list of your accepted payment options such as cash, bank transfer, debit/credit card, or online payment methods. If you only have limited preferred payment methods, ensure you give your client a heads-up and see if they agree with it to avoid potential payment disputes.
The bottom line
Dealing with your company’s invoices shouldn’t be complicated. As long as you’re using efficient invoicing software and create a professional invoice layout that offers convenience to both the merchant and the buyer, you can ensure that collecting payments won’t be a hassle and your clients will pay their bills on time.