If you run a small business, your invoicing system should be one of your most important processes. After all, an invoice is what you send off to customers or clients for goods or services delivered—it is how you get paid! If you are without an organised, well-managed invoicing system, then billing clients can be a tedious, drawn out process.
To help get you on the right track, we’ve put together two simple, free, downloadable invoice templates:
Mistakes and poor layouts in an invoice can make you look unprofessional and disorganised, so here are some tips and tricks for invoicing, to help ensure you get paid on-time.
Items to Include in Your Invoices
There are some vital pieces of information that every invoice must include. Your invoices should obviously cover how much you are owed, and how and when you would like to be paid. There are a number of other elements that you should include.
Your company contact details such as phone, email, address, name, ABN and website should be placed at the top of your invoice as a matter of professionalism and certainty. This also applies to the receiver’s details.
Description of Goods and Services
Adding a description of the goods or services provided. A specific, concise description makes everything clearer to the receiver so they know exactly what they’re paying for, and why. If available referencing a customer Purchase Order number or agreed quotation is recommended. This helps eradicate the majority of disputes and misunderstandings in relation to what the invoice relates to.
Rate of Payment
rate of payment. This will help your client understand exactly how you got to your
It is always a good idea to include your end figure. Your rate of payment may be:
- An hourly rate: if so, include both the number of hours per task and the hourly rate.
- A rate per job or task: in which case, you should ensure you itemise your invoice, according to each job or task.
If you’re registered for GST, don’t forget to include the GST amount as a separate line item.
Make sure that every invoice you send out includes a clear due date for payment.
Invoice Identification Number
Every invoice should have a specific identification number which can be used as both a reference point and for tracking purposes.
General Tips and Tricks for Invoicing
Automated Invoicing Software
These days, there is an abundance of good accounting software packages available, most of which include easy-to-use, professional looking invoicing templates. These can be either in-house or cloud based systems.
As with all types of software, the paid versions are a bit more reliable. Some of the more popular software products that can help with automating the invoicing and general accounting processes are: QuickBooks, Xero and FreshBooks.
A major benefit of using programs like these is not only the record keeping advantages, but also the time it will save you in generating your invoices.
Create Trading Term Policies
A list of solid policies/trading terms included in your invoice can go a long way to ensuring payments are received in a timely manner. The following are worth considering:
- Set time limits for payment – it is typically around 7 to 30 days from invoice date.
- Set your own preferred method of payment. Whilst cash can be one option of payment, it should never be the only option.
- Set times for when the client will receive the finished work. Eg pre or post receipt of the payment.
The key is to be clear and transparent right from the beginning of your dealings with a new client or customer from the point of quotation right through to invoicing.
Monitor and Archive Invoices
When you have multiple clients, it is essential to have a clear-cut way of organising your invoices that makes them easy to find at a moments notice.
If you have gone with an invoicing software program, then it’s likely that it has a numbering system which you can utilise to manage payments as they are received and to help action outstanding invoices.
Follow Up Promptly
Don’t let outstanding invoices linger. It is never rude to send off a friendly payment reminder and/or make a reminder telephone call. Receiving timely payments provides the base for a healthy cashflow. In many cases it is best to contact the customer prior to the due payment date to ensure they have the invoice and confirm it’s scheduled payment date.
Don’t forget, if you need a helping hand with your invoices, we’ve put together two free, downloadable invoice templates: