An invoice is simply a document which lets a client know that the time has come to pay for services provided. The best invoices are set out in a way that makes it as easy as possible for clients to process and approve them. The following items will help:
- The word “Invoice” in large letters at the top of the page. It sounds obvious but it helps the invoice to stand out in a stack of papers on a client’s desk.
- The date of the invoice. Payment terms are measured from this date so it needs to be clearly stated near the top of the page.
- Contact information. This should include the name in which checks should be written, postal and electronic contact details and a phone number. The aim is to make it easy for clients to pay by providing all necessary information in one place or an easy way to contact you with questions if there are any.
- When billing large companies, include the name of the client and the relevant department so that a centralized accounts department can easily verify the invoice. If a purchase order number has been issued, that should also be included.
- The service provided. State each step or service clearly, with the rate and hours or flat rate fee as agreed in the contract. This allows a client to quickly match up amounts and answers questions up front that might otherwise take time to resolve, so delaying payment.
- The amount that is owed. This should be highlighted in bold and it should be very clear that the client’s check should be made out in this amount.
- · Payment terms should be stated. These include the due date and the date when any interest penalties start. It should also include any discounts for early payment. There are standard terms which businesses employ to describe payment terms, such as net 30, and these should be used wherever possible for clarity.
The final step is following up. Keeping a detailed record of invoices and their due dates allows a business to follow up regularly to ensure clients have received and understood the payment terms. It also allows swift action in the event of the client having a problem making the payment, perhaps the setting up of a payment plan or an extension of the terms.
Everything about an invoice and the invoicing process needs to make it easier and quicker for the client to process the invoice than delay it.
