When you’re thinking of ways to improve your cash flow, don’t forget to take a look at your invoice template. If it doesn’t contain all the necessary information, you could experience delays — both in getting paid and in processing payments.
To make it easy for customers to pay your invoice, make sure it displays the following:
Issue date and due date.
Include the date the invoice is sent as well as when payment is due. This will simplify the following up on late payments.
You may use your standard letterhead: business name, address, phone number, and email. Or you may provide specific contact info for your accounts payable department.
Business name, address, and contact details for your customer should also be included. Use the name of the organization that will be issuing payment if it’s different from the DBA name.
Each invoice you send out should have its own unique number. Create your own numbering systems, such as a simple chronological order (2018-01, 2018-02, etc.), or subsets for each customer (WD-2018-01, WD-2018-02, MS-2018-01, MS-2018-02). In addition, the invoice should include your job or project number, if you use them.
Some customers use their own job or purchase order numbers to track their expenses. If they give you a number like this, be sure to include it, as it will expedite their payment process.
Products and services sold.
This is an itemized list of everything you’re billing your customer for. Each line should include a brief description of the item, the quantity, the unit price, and the total price. Add up all the numbers in the total price column and put that grand total underneath.
Additional charges and discounts.
Next, list and subtract any discounts you’ve promised to the customer. Add shipping charges (if applicable) and sales tax.
Payment terms and methods.
Clearly state your late fees and on-time discounts. List which types of payment you accept and provide whatever info customers need to pay the invoice, such as your Paypal address, bank account number, or link to online payment.
Tips for Getting Paid Faster
Creating the invoice is just one part of a protocol that can significantly reduce your time and effort. Here’s the bigger picture:
- Advise customers upfront, preferably in the contract, of your billing and payment expectations. Don’t just surprise them after the job is done.
- Send invoices more frequently. Establish a schedule, say once a week, to ensure that invoicing doesn’t get put off until you “have more time.”
- Keep itemizations brief. If the customer requests more detail, send it in supporting documents.
- Copy the same language from the customer-approved quote into the invoice, to help prevent misunderstandings or disputes.
- Use a smart invoice template. Integrate with your spreadsheet software to automatically fill in customer information and standard pricing, calculate total charges, add taxes, perform bank reconciliations, send past due reminders, and more.
Xendoo understands how hard it is for small business owners to find time for accounting chores, even though they know effective invoicing can make a big difference to their ongoing success. Our monthly services include Xero accounting software that offers robust invoicing tools to get you paid faster.