The financial end of running a business is never a business owner’s favorite task. However, it’s an essential part of running a successful business and includes invoicing clients. If it is your responsibility to send out invoices to clients, it’s vital to use a number of methods for creating clear, precise and well-organized information that provides the client with everything they need to successfully send payment.
Having a solid invoicing system can help reduce your risk of late payments or even nonpayment.
1) Decide on software or app. While entering your invoice information manually into a basic spreadsheet is doable, it isn’t ideal as it takes longer and makes organization more difficult. Invoicing software provides a fast and efficient way to send invoices, with a variety of organizing and filing options. Many times, the software saves information for some of your clients so that you only need to enter the current information, rather than starting from scratch every time. You have a number of software choices, including a range of prices and features such as some are online-based and others are loaded onto your computer.
2) Include terms of service. It is easy to forget this very important detail, but it is vital that you remember to include the terms of service on your invoice. This includes the date the payment is due as well as any late fees or penalty fees should you not receive payment by the due date.
3) Include description. Providing a description under the product or service performed on the invoice is voluntary, but is helpful in many cases. By including additional details about the service performed, your client will have a better understanding of what they are being billed for, especially if they regularly order from you; the description allows them to separate the different services or products they are being provided and paying for.
4) Include your contact information. Your business contact information including your name and business name, physical address, email address, phone number, fax number and website should be included on the invoice; preferably at the top of the invoice. If you are using invoicing software, this will be automatically included on every invoice you create.
5) Incorporate a tracking system. To better track and manage your invoices, develop a tracking system by assigning and including an invoice number on each invoice you create and print as. As another one of the small business invoicing tips, this allows you to keep your invoices organized electronically by the invoice number, and makes it easier to locate them at a later date. If clients call in with a question or concern about their invoice, the invoice number allows for efficient tracking.
6) Denote acceptable payment methods. Clearly state on the invoice how your business will accept payment for the products or services provided. If you accept checks, be sure to include who they should make the check out to. If you also accept money orders or credit card payments, include that information as well. Be as detailed as possible when describing how your business can take the client’s payment.
7) Record payments when received. Once you have sent out the invoice and received a payment, you will need to record the payments. Try to do this as quickly as possible by developing a payment recording system in your office. That way, you will have a smooth system for keeping track of payments that you can look at later in order to determine which services have been paid for and what payments you are still expecting.
Invoicing is an important part of running a small business as it ensures that you will receive payment in an efficient manner for services or products you have provided for your customers or clients. By using these small business invoicing tips, you can create a system for invoicing clients and remove some of your accounts payable risks.