As a business owner, creating invoices is one of the best ideas you can use to manage your business. The moment you sell to your client with a product or service, you will be expecting them to make some payment in returns. But before you get paid, you will have to create an invoice for the goods/services bought. In this article, we will provide you with useful tips and guide on how to make an effective invoice. But first, let’s understand what an invoice means.
What is an invoice?
An invoice, also known as a bill or sales invoice, refers to a document issued from the seller to the buyer requesting them to pay for the goods or services offered. These documents play a significant role in any kind of business. For instance, they help the business owner to get timely payments. Plus, they facilitate easy tracking of one’s accounts as well as financial flow. Lastly, an invoice helps strengthen the relationship between the client and the business owner.
How to Write an Invoice
Writing an invoice isn’t as much difficult as most people think. With the following guidelines, you’ll actually find the whole process exciting and easy.
Create a professional layout
I guess you’ve heard them say that goes ‘the first impression lasts longer.’ What am trying to say is that for your invoice to impress, you need to choose a professional layout that will generate trust among your clients. As a bonus, you can add your business logo to make it formal. After the logo, you can put the word ‘invoice.’ This will attract the attention of your customers the moment they receive it.
Mention the company and client details
Here, you will write down the address of your business, phone number and email or fax. This will make it easy for the client to reach you should they have any queries. Then, you can include the client’s name and official address so as to make the invoice reach the intended person.
Include invoice details
The other important thing to mention is the invoice number. An invoice number helps maintain efficient record keeping, making it easy to when filling tax. At the same time, you need to include the date the invoice is written as well as the date of payment. Dates help remind the clients that they should pay before a certain period elapses.
Write the descriptions of items
Here, you need to give a brief description of the items that the client owes you. While the descriptions don’t need to belong, they should be detailed enough to make your client understand what they are expected to pay. If at all they don’t understand what you are requesting them to pay, the chances are that they will question your invoice hence delayed or no payments. Therefore, you need to describe the item, the quantity taken and the associated price.
Don’t forget the line for the totals
Of course, your invoice shouldn’t miss the subtotal of the amount owed. As a golden rule, make your subtotals bold or highlighted to make them highly visible.
Just in case you have discounts or taxes, you need to indicate. This will inform the customer the amount they are supposed to pay.
Add Payment terms and options
As mentioned earlier, the main purpose of creating an invoice is to request for payments. Therefore, this could be the most important part of your invoice. In your invoice, be sure to include the payment due date, and penalties charged for late payments. At the very time, let the customer know that you offer a money-back guarantee should there be any claims or disputes.
Importantly, provide the client with various payment options. This can either be cash, check, debit cards, credit cards, PayPal, to mention a few.
While this part is often overlooked, it plays a significant role in knowing what the other party feels about the invoice. Besides, you can use this part to leave a positive impression, or even request for referrals. Also, you can express your gratitude for choosing your business.
Free Invoice Templates
Tips on creating an invoice that gets you paid quickly
Every business owner wants to get that quick payment upon successful delivery of goods or services to their customers. According to experts, one of the best ways to achieve quick repayment is to write a compelling invoice. Therefore, when writing one, be sure you have the following tips at the back of your head:
- Go digital
One secret you probably didn’t know is that most clients are going digital. Therefore, as a business person, you will be doing yourself good than harm is you migrate from manual invoices to digital/electronic ones. Electronic invoices are gaining popularity simply because they are easy to read, easy to format, and so easy to pay.
- Send the invoice immediately when the job is done
One thing that will work for you is to send the invoice immediately when you’ve made the delivery successfully. Timing when the client’s mind is still fresh makes them respond to your invoices almost instantly.
- Be specific
When writing the invoice, make sure you avoid generic terms. Instead, itemize each product item while mentioning their expenses alongside. If possible, you may want to attach copies of receipts to back up your claims.
- Provide many payment options as possible
If there is one thing you wouldn’t want is to make your payment methods rigid. Therefore, in order to make it easy for your clients to pay, make sure you provide as many payment options as possible. Remember that some customers will be comfortable with debit cards and other credit cards or PayPal. In order to make it convenient for all such types of customers, you need to provide all the available payment options.
- Make payment terms as short as possible
Again, when creating an invoice, you can make the payment periods shorter, let’s say 14 days or less, instead of a 30-day period. The irony is that some clients will want to wait until it’s the last day so as to make the invoice payments. Also, if you reduce the payment period, the client will improve his/her commitment to making payments early.