Need to create an invoice but not sure how to do it?Invoicing is important for small businesses as it can mean more customers for your company.A professional invoice can be used to improve receivables.
Step 1: It should look professional.
It is important that you include key pieces of information in your invoice, rather than just writing the amount on a piece of paper.If you don't use the word "invoice," the customer will know the invoice is an invoice.The invoice needs to be given a number.You should keep a record of the invoice.You should include a unique identification number on the invoice in order to do this more easily.A tax identification number is added to invoices by some businesses.Check with an accountant to see if you need one.Non profit organizations and child-care agencies will usually include tax identification numbers on their invoices.
Step 2: The invoice has a number.
You should retain a copy of each invoice if you want to keep better track of them.The invoices should be ordered by number based on the date they are sent.You can either buy invoices that are already numbered, use software that creates them for you, or create your own and number them.If there is one, include the purchasing number in the invoice.You can use this to improve accounting methods at your company.On the front end of the invoice, ask if customers need any special information, such as an employer identification number or purchase order.If you are dealing with a customer, ask who the invoice should be directed to.
Step 3: The invoice needs to be dated.
If you want to get paid in a timely fashion, you should date the invoice but also note the terms of payment that you expect the customer to follow.At the time of purchase, these terms should be spelled out.The date that the invoice was issued, as well as the date of purchase of the goods or services, should be on the bill.Make it clear to the consumer how long it will take to pay.The payment may be due within 30 days.There are companies that offer discounts.Spelling them out clearly on the invoice is what you should do if you do.If the customer pays the invoice in 30 days, you can offer a 1 percent discount.
Step 4: A copy of all invoices is needed.
All invoices should be kept for at least six years by small businesses.Good business accounting is important for tax purposes.An accountant can help you understand the rules of record-keeping.It is possible to keep records in electronic form.Keep a back-up copy if you do.You should post cash receipts immediately so you can see which accounts are outstanding, which customers have sent in some money, and which are not.The law considers invoiced payments to be an Unsecured loan, meaning it is harder to recover money from a customer if they don't have money to pay.
Step 5: Invoices should be kept to a minimum.
When it comes to revenue, there can be less margin of error for a small business.If you want to get payment up front in cash, try to keep invoices to a minimum.Many small businesses have a third of their receivables delinquent.Should you offer services for an upfront flat rate or a more expensive hourly rate, since you might not get what you're owed?
Step 6: An electronic invoice service can be used.
Although it costs money, such services can help you organize and track your invoices.Some services allow you to send invoices by email.You can view which invoices have been paid and send reminders to those who are not.It's possible to send out invoices by phone.The customer's account history is included in some of the services.You can keep track of customers and payments with this.You can add your company logo to the invoice if you fill in online boxes to update the amount.Many of these services can be found on the internet.
Step 7: Give a clear description of the service.
It's important that you clearly state which service was provided for the requested money on the invoice.Don't be vague.The invoice should make clear what the customer ordered.Add ons such as tax, handling charges or other costs should be itemized.The total amount owed should be presented at the bottom of the invoice.You should include the quantity of goods or services purchased in addition to describing what the customer is being charged for.This may be hours billed in some cases.The per-unit price should be included with the overall price.Sometimes customers are charged a flat rate for many hours or units, and sometimes they only buy one unit of something.
Step 8: Please include your contact information.
One of the most important pieces of information you must include on an invoice is how your company can be contacted and where the customer should send the money.The customer should not be assumed to know what the invoice is for.Make sure your company's name is legible, as well as your address and telephone number.If the customer wants to call the company with questions about the bill, they should include a customer service number.The customer's information should be included.It is important to make it clear who paid for the goods and services.You don't need to look it up if you get good information from the customer on the front end.If you are dealing with a company, it is a good idea to include the name of the individual contact who placed the order.You could add the name of the person who took the order.
Step 9: Adding a personal note is a good idea.
You might consider personalizing the invoice if you want the customer to return to purchase more goods and services.Businesses can thank customers with message boxes on their invoices.Adding "please" or "thank you" to an invoice increases the chances of it being paid, according to one study.Thank you for your business or we can help you build strong connections with customers.An invoice message box can be used to note important information about a customer.
Step 10: The time frame for payment is on the invoice.
It is hard to miss if this is included in bold or offset lettering.Payment windows are usually 30 to 90 days.It's important that the customer knows how to make the payment, where to send it, and who to mail it to.The details that a customer would use as an excuse for not paying should be included.Try not to use the words "upon receipt" when requesting payment.Customers may claim that they did not receive the invoice.The date was given for the goods or service.The invoice should be dated with the date it was sent out.Agree to payment terms on the front end before you deliver the product or service.
Step 11: Consider electronic delivery.
It is possible to deliver invoices electronically.It can lead to more payments for some customers.Businesses receive payment faster if they send online invoices.Paper costs can be reduced with electronic payments, and they can also help eliminate fraud associated with paper checks.Some companies allow customers to make their own choices.Some customers, such as those with poor eyesight or who don't know how to use computers, will not be helped by electronic payments.Some customers don't have time to purchase stamps, go to the post office or deal with paper invoices, so electronic payments are convenient for them.It is more difficult for them to argue that they did not receive the invoice.
Step 12: Late fees or interest could be charged.
One way to get customers to pay is to charge interest on late payments or late fees.Customers may prioritize the invoices that charge interest and late fees over the ones that do not, sending your invoice to the top of their payment pile.On the invoice and on the front end at the time of purchase, be very clear about how much you will have to pay in interest and late fees.You can tell the customer that he or she will be charged interest on late payments.Check the laws and regulations in your area.
Step 13: Incentives should be offered.
Negative reinforcement can be used to encourage customers to pay their invoices, but it is also possible to use positive reinforcement.If the customer pays early, the invoice could include a discount on the total payment.If the customer pays by a certain time frame, you can give them gift certificates, credits, or future discounts on products.Positive incentives can help build brand loyalty.No one likes receiving a bill in the mail and you want the customer to buy from you again.Businesses sometimes offer customers early settlements to take care of the amount, which is better than nothing.Check the address of the customer to make sure they have received the invoice.
Step 14: The customer's risk of non-payment is determined.
If the customer is likely to pay, provide goods and services in advance.People at risk of non-payment should be given cash up front.The customer may have a long-standing pattern of paying invoices in a timely manner.How big is the customer?This can work either way.It is possible that the company you are dealing with is large enough to pay its bills.The risk of loss to you is higher if the company does not pay up.If you want to gamble on a riskier customer, you need to know how much risk you can afford.If this is likely to be a one-time sale, consider whether you are cultivating the customer on a long-term basis or not.