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Invoice like a pro 10 best practices for small business invoicing by Invoice InvoiceApp Blog

August 1, 2023
Bill Kimball

Our online invoicing solution factors in all of the best practices we’ve mentioned above making it the best tool for small businesses looking to do invoicing the right way. Eliminate the wait time and uncertainty of traditional mail by sending it directly to your client’s inbox and requesting a read receipt once it has been opened. Most client billing software programs have this capability. An invoice number is beneficial for tracking invoices, as well tracking your business’s progress.

  • To decipher the meaning right-off-the-bat, your clients need an easy-to-understand invoice and preferably a short one.
  • Make it look like a natural part of your ongoing communication with your client.
  • Adding a thank you note is an invoicing best practice because it is a nice gesture that produces goodwill with your client.
  • Project management and invoicing software can help you smooth out the invoicing process.
  • If you send payment requests late, your client might not even remember the transaction.

If you give your client’s online or telephone payment options, it could speed up the payment process. It is your responsibility to provide your client with an easy-to-follow invoice that clearly shows them the amount they need to pay and the day it is due. Keeping those details close together in a clearly defined area (usually the bottom, right-hand corner) will give your client a quick reference point when it comes time to pay the bill.

Include a statement to the effect that “A Late Fee of x% may be assessed on past due balances” if you ever want to enforce such fees. The exact language can vary and you might want to have your legal advisor review or provide the exact wording. The fee percentage (interest rate) is regulated in some states so be sure you know what the limits are. Practically speaking this is typically in the 1% – 1.5% per month range. More than that could seem excessive; less than that isn’t worth the trouble.

Invoicing Best Practices: The Quick N’ Easy Guide (

Your state may allow you to enforce late payment fees, although it may be required that your customer agreed to these in the contract you established with them. Try Bonsai’s invoicing tool to seamlessly send payment requests for your business. When billing a client, you want to include various payment choices for your client to choose from. Give your clients an option to pay via cash, check, credit card, wire transfer, etc.

They may need to reference this information later on and there shouldn’t be any doubt about what they purchased when the review the invoice. While proper invoice handling practices may not be the most interesting topic ever addressed, it is certainly one of the most important. Proper invoice processing is key to creating a plumper bottom-line for those who get it right from the start. Project management and invoicing software can help you smooth out the invoicing process.

Proper invoice processing also reduces the risk of running out of money and ensures that invoice payments are sent on time. Best practices look beyond the short-term goal and look at the longevity of the business. CFOs or financial controllers can then plan accordingly to meet financial obligations. If you send payment requests late, your client may not even remember the transaction. A customer disputing an invoice would cost you time and money. That’s why it is important to send requests within a reasonable time frame from when it is due.

invoicing best practices

Ask industry peers about the individual or organization’s reputation before doing business with them. Before you generate the invoice, make sure you consider the client’s expectations and budget. Verifying an invoice is one of the most important things you or your AP staff will need to do. There are several things that will need to be checked when verifying. Rebecca Hey is a content writer specializing in SaaS, digital marketing, eCommerce, lead generation, SEO, website hosting and website development.

Invoice Cycle Time: What Is It and How To Improve It

After all, it’s hard to collect an invoice that the customer does not have or which is inaccurate or incomplete. If you send payment requests late, your client might not even remember the transaction. For example, if a customer disputed an invoice, it would take time and cost you money. So, sending requests within a reasonable time before the deadline is crucial.

invoicing best practices

This can sour relations with your customer permanently, resulting in you losing all future business with them. Companies often focus more on the efforts of the accounts receivable team. However, it is just as important to monitor money leaving the business as it is to monitor the money coming in. Invoice details and resulting payments must be accurate to ensure this. If a client disputes the added fees, make sure you have it written in the signed contract how much they would pay. After you send the invoice, it is always good practice to add a thank you note once you’ve received a payment.

We’ve probably all struggled with paying an invoice at some point. Do everything you can to help your client navigate to making the payment in no time. A small error on your invoice could mean the difference between getting paid and not.

Even if you follow these guidelines, clients will question an invoice. If your invoice is hard to read or understand, it might not get paid or paid correctly. You have to make it as easy as possible for a client to pay. Most employees dislike filling timesheets since it’s typically a manual and tedious process. This means you don’t have to wait until the end of a project for a cash injection, and you can better manage the project’s costs.

Payment Process Options

Not only may accommodating your client or customer’s payment choices and schedules improve their customer experience, but it can also accelerate your receipt of payment. The invoice total should be followed by one or two lines detailing the accepted deposit methods. Again, you may be able to expedite the payment procedure if your client has the option to pay by phone or online. When a customer disputes an invoice, it can cause the entire invoice process to be delayed, costing you both time and money.

  • The address field for an invoice will contain the company name and mailing details, but the invoice itself should directly address the name of the person who approved the purchased.
  • Applying these will keep your accounts payable team on the right track.
  • You don’t want to clutter your invoice with a bunch of information and make it hard for your client to pay you.
  • Writing out the scope of work and list of services will let the client in on what they are being charged for.

But, again, double-check with your new client or customer if it’s unclear where to send the invoice from the purchase order. Gaviti is a cloud-based accounts receivable invoice automation tool that can help you streamline your invoice procedures. Our software improves your company’s ability to ensure customers pay their bills in full and on time. Automated accounts receivable invoice processing generates the cash you need to meet your accounts payable obligations. When sending invoices to clients, the best thing you can do is to take all of the work off your plate and automate the entire process. Bonsai is an invoicing software that does all of this and more.

Full-suite platforms like Forecast make sure you have information flowing automatically between projects and invoices. It reduces manual work and saves time, plus the chances of human error reduce significantly. The first step of the accounts receivable management process is invoicing.

This strategy also enables you to effortlessly monitor late, missed, or overdue payments on your accounts. Typically, you would open an invoice template, enter it into your email account, and begin typing. However, there are other factors to consider before mailing an invoice. Sign up for a free trial to Monograph to use the right invoicing tools and make billing part of your culture. Rather than having to record or remember all the ways that you spend time during the week, automatic time tracking reduces timesheets to a few clicks each time you switch activities. In response to the major differences in architecture invoicing and almost every other professional service, Monograph built an invoicing workflow specifically for architects.

How Can I Improve My Invoice Processing?

Others may be sent electronically, where they will have to be printed for processing. Three crucial pieces of information to include on your invoice are the total amount due, the due date, and the terms of payment. This keeps everybody on the same page, and makes sure everything is clear for both parties. It’s not transparency to send a huge list of time registrations to your client.

Build your timetable into all of your agreements with clients and consultants. Make sure you collect from your clients before you pay your consultants. Try to create a clear invoicing workflow and timetable for your project owners and sub-consultants. Sometimes the best invoicing practice you should adopt starts before sending the bill to the client.

It doesn’t have to be a whole novel, but simply a short paragraph goes a long way. You can personalize all of them or keep a standardized one, like “We appreciate your business.”. Checking the history of each invoice is another effective method for managing your billing. Thus, you will know precisely when each is dispatched, delivered, paid, and deposited. Maybe the client doesn’t trust you, or they don’t know how these projects work.

The standard business procedure is to send out monthly bills. Now you have got to know about an invoice processing cycle. Read the following article about ten best practices when considering invoicing for your business. Once you have the right fee structure, it’s important to use a project management software that lets you create an invoice based on the fee structure you picked.

– Set Expectations at Client Onboarding

It’s an opportunity for you to explain to your client what value you provided, and at the same time it’s a great way to build up trust by having transparency in your invoicing. Additionally, you can easier answer questions later on, if your client gets back to you with a question or two. Your business invoices should include a detailed breakdown of the charges, such as item price(s), packaging, delivery, hourly rate, etc. Providing facts can help your buyer comprehend how you arrived at the overall amount. For example, if you’re doing landscaping or accounting for a customer, include a copy of your logbook or summary of hours so they know how long you worked and your hourly rate. Under the invoice total there should be a sentence or two explaining the various payment methods that are accepted.

However, in 2022, the benefits of automated invoicing and billing software are too numerous to ignore. It would help if you had a mechanism in place for recovering past-due payments, which you can utilize to initiate recovery procedures. It’s also important that you have easy access to project financial information to share with the client and quickly clear up any misunderstandings. A signed agreement is your best defense—and the best way of keeping out of small claims court over your invoices.