Invoicing 101: The beginners guide to getting paid

Billing customers and clients correctly is vital to the continuity of small enterprises and large corporations alike but it can be a difficult process if you don’t have a robust strategy with stringent policies and capable software in place. Carefully and wisely managing your invoices will ensure that any money you are owed is paid on time while boosting your business professionalism. There are an abundance of tools available that can help you along the way and the majority can be tailored for your specific circumstances so they will work for you, your employees and the organization.

Financial mismanagement is one of the most common errors for SMEs and entrepreneurs to make, especially those that are working as freelancers or contractors as they often don’t have the financial expertise at hand to optimize their finances.

Invoices are legal documents that you send to clients to bill them for any services or products that have been rendered. They are usually sent during the shipping of a product or after the completion of a service. Sending an invoice on time will help to ensure that your business functions effectively and has the capital to call on to make important strategic decisions. It will also act as a record of financial data such as revenue, and be a vital resource when you complete tax documents. The importance of invoicing cannot be overstated.

Pre-made templates

The digital age has made it easier to create and send invoices to clients located anywhere in the world. Software service invoicehome.com offer pre-made invoice templates that can be printed or sent via email to clients and are fully customizable with PayPal and MasterCard payment buttons. You can also use your own logo to help with your branding efforts and you could even link to social media channels to boost engagement further. Try to think of invoicing as a key marketing and business function, it is a great way to establish your presence in the industry and give clients a reminder about the quality of your work.

Now that you know what your invoices will look like, it is time to outline policies regarding payments. The reality of businesses is that not every client will pay on time so you need to decide on certain credit and billing policies and a strategy that will ensure any issues are identified quickly and resulted. You ideally want to automate invoicing, tracking and reporting to streamline the process. Credit policies will help to define factors such as how much credit you are willing to give and to who, while billing will define the frequency of payments. Remember to always communicate billing terms clearly with clients. You also need to think about accepted methods of payment such as PayPal or credit card payments. Any method is fine as long as you and your clients are comfortable with how payments are made.

Writing

When writing your invoice, begin by placing the client’s information directly below the professional header so they know it is for them. This information should include the client name, mailing address and website and who exactly the invoice is being billed to. Another section near the top of the invoice should list the invoice number, the date it was prepared, when the payment is due and the preferred payment option in that order. Below this important information should be a breakdown of the products and services you are billing for. Invoices usually include a quantity column, a description of the product or service, the unit price and amount. You can then calculate a total amount, which should be in bold near the foot of the document, and any necessary taxes.

There should also be a section of terms and conditions that specify the finer details of your agreement with a client. Always remember to include your own contact details too, so list a full name, street address, telephone number and email address. Failure to note this information at the top or bottom of an invoice could result in delays, so make sure they know every key detail. Always remember to include an invoice number somewhere on the document so you can monitor and organize them appropriately. Backing up your invoices is important, so photocopy, print or download them to your computer so you always have an additional reference. If a client has not responded within the allotted time, send follow ups to politely enquire why payment hasn’t been made or get into the habit of creating monthly statements as a proactive reminder. Finally, always remember to respond swiftly to any invoicing concerns raised by clients.

Establishing an invoice strategy using the information provided here can transform your invoicing activities and ensure that your financial position is not jeopardized.