What's in Your Invoice?
TGIFF! Thank you for coming by. Today we have a really fun topic to talk about, Invoicing! My first job after college was at a large company. I was hired as a financial analyst, and I was told I would be in charge of invoicing. Over the course of a couple of years, I handled over twenty different accounts. I had to understand each contract and how that contract translated into a billable invoice. In my role of a bookkeeper and as a small business owner, the skills I learned in my first role help me each day.
Your business should have a standard invoice template that you use to bill your clients. This will make it easy for you to come in and bill each client month after month. You can use different tools to create your invoices. If your business uses Quickbooks or another accounting software, there is most likely an invoice tool built in. By integrating your invoicing with your accounting software, you can streamline your processes, as your accounts receivable will be updated and tracked as soon as you create your invoice. You can also use Excel or Word if you want to create your own custom template. There are several things you should include on each and every invoice.
*The Date – You should have the date that you are issuing your invoice on. This is important to track when invoices went out. Down the road, you may not remember when you sent an invoice, by dating them you will have the record.
*The Due Date – you want to include your payment terms. Are your invoices due upon receipt? In thirty days? Next Quarter? Never? Without including clear terms/payment due date, you are leaving it up to your client to decide. Even if you have a contract laying out payment terms, still include a line for payment terms on the invoice.
*Unique Invoice Number – This is so important and something I see many small businesses miss. Each invoice you send should include a unique invoice number because it will allow you and your clients to easily track invoices. It identifies each invoice individually, so there is no confusion.
*A good description of charges - Include a good description for what you are billing for. The clearer you are at describing each line item, the more likely your clients will understand what you are billing for. If your clients understand why they are being charged, they are more likely to pay the invoice. You also can cut down on the number of calls and emails from clients trying to understand the new invoice.
*Name, Address, Contact Information – Make sure each invoice has all your important information. This allows the client to know who the invoice is from, where to send the payment and who to call/email with questions.
Those are some basic things each invoice should include. Depending on your services and products you may want to include additional information. By creating a useful invoice, you will help your bookkeeping efforts by giving yourself a leg up on tracking and by leaving a clear history behind.
Have A Great Weekend!
*We hope you enjoyed our blog. Please note that the intent of this blog is to provide general information and should not be construed as financial, financial tax, accounting, legal, consulting or any other type of advice regarding any specific facts and circumstances, nor should they be construed as advertisements for financial services.