Invoicing is an extremely important practice for small businesses. It may be how you generate all of your revenue, or just some of it. Invoices are also an important part of your record keeping. Below are some tips for making invoices and for sending them out. They’ll help ensure that your invoices are professional, that money is coming in on schedule, and that you’re following invoicing best practices.
Tips for Making Invoices and Invoicing Best Practices
- Make sure recipients know when to expect your invoices and how much you’ll be billing for. This promotes timely payments, while surprises tend to slow payments down.
- If your invoice total is higher than an estimate you initially provided or is otherwise more than the recipient is expecting, include a note that explains the difference.
- Include your brand’s logo and contact information at the top of all invoices. If you have a bookkeeper or other dedicated person responsible for invoicing, include their name and contact information too. Also include the name and contact information of the recipient/party responsible for payment.
- Put the issuance date near the top of the invoice.
- Specify the exact date that payment is due by prominently near the top.
- Identify the total amount due prominently by the due date.
- Give every invoice a unique number. Keep them sequential for the same recipient for easy tracking on the part of both parties. It will be helpful for you at tax time, too.
- Include your tax identification number (TIN). The recipient may need it for their records, so head off this potential cause for delayed payment.
- Create an itemized list of products or services that you’re billing for. List the individual costs and date of delivery/completion.
- Add a separate tax line if your business has to pay any taxes on the goods or services delivered.
- Put a total beneath the itemized list and tax line. Make sure it matches the total due at the top of the invoice.
- Let the recipient know what their payment method options are. Providing a way of making payments electronically often speeds them up.
- Keep the invoice professional, clear, and concise.
- Wait to send invoices until any agreed-upon milestone, or after delivery/completion of the products or services. But don’t wait too long; send invoices promptly.
- Don’t be shy about sending follow-ups about late payments.