5 Points to Remember Before Hitting Send on Your Invoices

Regardless of whether you have a side hustle, a small business, or a large-scale organization, invoicing is one of the most important elements. It’s what keeps your cash flow consistent and your revenue coming in, and it also helps you to forecast for the future and keep track of payments for tax and other accounting purposes.  

Surprisingly, many businesses don’t pay too much attention to their invoicing process, or the actual invoices themselves. But your invoice is an incredibly powerful tool and it should be viewed as such. An invoice needs to show your customers how professional you are and encourage them to pay on time (or early) with a variety of payment gateways such as direct debit and online payment systems.

With that in mind, here are five points that you should always remember about invoicing before you hit the send button:

Use a Clear Layout for Your Invoice

The layout of your invoice is vital. First, it needs to be clear that this document is an invoice. The word should be somewhere near the top and in clear, bold letters.

In addition to this, you should have your business name and branding highly visible on your invoice—usually somewhere near the top. Next, you need to include the details of the person or business that the invoice is addressed to.

The next section of your invoice needs to have ample space for the details of services or products you provided and that the customer is due to pay you for. The layout of this section should leave no room for interpretation. You want your customers to see immediately what they’re paying for.

Finally, you need room for payment terms and details. This is another area that needs to be thoughtfully laid out. You don’t want the means of payment to end up cramped in a corner somewhere. You want to make it as easy as possible for your customer to pay you.

Get the Details Right

Now that you have the spacing and layout right, it’s time to add the details for this specific invoice that you’re about to send out. You should be working off an invoice template, meaning your details should be correct, but it’s never a bad idea to double-check this.

You should always double-check that the customer’s details are correct too. The most important details for businesses are usually the tax number and the physical address. The person for whose attention the invoice is for is also important.

Next, make sure that the information about what product or service you sold is right. The quantities and the prices must all reflect your agreed rates. There should be no back and forth after you send the invoice out about the price as it should have been agreed to upfront—and customers don’t like surprises!

Set Clear Payment Terms and Options

As the service or product provider, you’re in the driving seat for payment terms and options. It’s really up to you to decide how and when you get paid. Of course, there’s always room for some discussion (more on payment runs in a bit).

You should be clear on your invoice about when the payment is due. Common options include payment on delivery, payment with a set number of days (15, 30, 60 and 90 are the usual timelines), and payment by the end of the month or the end of the following month.

When you lay out these terms, you set expectations for your cash flow and allow your business to operate according to those expectations. You also give your customer clear instructions of when payment is due, giving you the right to chase payments when they’re late. You could even utilize accounting services Canada, or local to you, to help you keep your finances in order and ensure that payments are being kept on top of. Arranging a consultation with a company that can provide you with bookkeeping, accounting, taxes, and invoicing is a proactive step toward financial organization which can positively influence success in your business.

In addition to payment terms, you should include as many options for payment as possible. There are so many choices now.You can accept cash, credit card, electronic transfer, PayPal, Apple Pay, Google Pay, Venmo, and any other option that suits you. When you allow for various options, you actually increase your chances of getting paid on time or even early, so the more you make available, the better.

Ensure The Invoice Is Easy To Track

Each invoice you send out should have a means of being tracked beyond the customer details and the date. These two data points are important and should always be on each invoice you create and in your tracking list. However, you should also have a means of labeling your invoices so that you can see at a glance what invoices have been sent out and paid or not paid. It is a good thing to consider a revenue cycle management company if you have larger numbers of invoices being sent out to keep everything organized.

The best way to do this is to use a sequential alphanumeric or just numerical code structure. Each new invoice gets the next code in the series, so you can invoice one customer again and again for the same amount but know which of those invoices was paid and when you sent them out.

Ask When Your Client Does Payment Runs

Back to the payment terms and options. Sometimes companies will do payment runs at specific times and they aren’t able to easily deviate from this structure. This is usually the case with larger businesses, but some smaller ones also have these kinds of structures in place for their own accounting purposes. 

It’s always good to ask your customer up front if they do invoice processing at specific times in the month and if they have payment run dates. This way, you can ensure that your invoice gets to them in time for their schedule and you get paid in good time. If you don’t ask about this, you risk ending up waiting for an extra month or payment cycle when you were depending on the money coming through earlier.

Get It Right Before Sending and Get Paid on Time

Your invoice is a crucial part of your business. It’s a connection to your customer and an agreement between your business and them. 

When you take the time to ensure that you get the details right and stay in open communication with your customers, you’re far less likely to incur late payments or awkward conversations about money!