How to Improve Your Invoices

Sep 7, 2012

Your invoices only let customers know how much money is owed on a project, while also keeping them up-to-date on a project’s progress.

If your invoices are hard to understand, customers may wonder if they’re really getting what they’re paying you for and, in some cases, could be paying you late.

“If at least a third of your receivables are 60-plus days delinquent, you’re not alone,” Gwen Moran wrote in a recent article. “In fact, you’re one of 40 percent of small businesses in that predicament-and your invoices may be partially to blame.”

Moran suggested making sure these parts of your invoice are complete before sending them out:

Seller info “The source of the invoice should be clear and include your company’s name, address and telephone number,” she wrote. “The latter is important so the customer can immediately call with questions about the bill.”

Customer info “Be sure your invoice includes your customer’s full company name and address,” Moran wrote. “It’s also a good idea to note the individual contact who placed the order or authorized the purchase with your firm in case there are any questions about the invoice.”

Invoice number “Generate individual invoice numbers not only for your own accounting purposes, but also to help customers find the correct document and track it through their bookkeeping systems,” she wrote.

Date and terms “The invoice should have a clear date of issue and note the terms of payment,” Moran wrote. “For example, the invoice may be due in 30 days or may be paid at a 1 percent discount if remitted within 10 days.”

Quantity, description and price “Each invoice line should state the quantity of goods or services purchased, whether it’s a case count of items or the number of hours billed; also include the per-unit price,” she wrote. “Alternatively, state if the customer is being charged a flat rate for services or for a bundle of goods and services.”

Tax, handling charges and other add-ons “Any taxes, fees, handling charges and other additions to the invoice should be clearly itemized,” Moran wrote. “The invoice should also have a total of all line items at the bottom with a notation to indicate that number is the total sum owed.”

Make it even better “Consider adding a message box to your invoice template,” she wrote. “There, you can thank customers for their business, note important account information or include details on seasonal promotions.”

To read the complete article, click here.