Creating and sending invoices is one of the more time-consuming aspects of running a business. However, making sure you prepare invoices correctly and professionally is vital when it comes to running your business efficiently and eliminating late payments caused by incorrect or confusing billing statements. To make sure this process goes as smoothly as possible, take the following tips into consideration:
1. Understand tax laws
Tax laws change depending on your business’s location. If you’re a new business owner, be sure you understand what taxes you need to charge and what registrations you should complete before moving forward. When creating your invoices, you should clearly itemize the tax amount and include any other required information, such as a business registration number. For some operations, such as nonprofits, you may need to include a tax identification number, as well.
2. Use an invoice numbering system
Generating invoice numbers is helpful for both you and your customers. This will make it easier for you to track and organize your invoices for accounting purposes, and it will be crucial in the event of an audit. Customers will find these numbers helpful if they have questions about a specific invoice and for their own bookkeeping records.
3. Don’t forget the date and payment terms
Many late payments can be avoided if the invoice clearly states the date of the bill and the payment terms. For example, specify if the invoice is due in 30 days, 15 days or upon receipt.
4. Follow up on unpaid invoices
Even if your invoices contain no mistakes, you’ll still have to deal with late payments. While it may be an unpleasant process, reminding customers about unpaid invoices is an important part of maintaining a successful payment cycle and a professional image for your business.
5. Include clear seller and customer information
Make sure your company’s name, address and telephone number are clearly visible on the invoice. This is important in case customers would like to call right away with questions about their bill.
The invoice should also include the customer’s full name and address. If the order or purchase came from another company, it’s a good idea to specify the individual who placed the order or authorized the purchase.
7. Include quantity, description and price
Each invoice line should state the quantity of services or goods purchased and the per-unit price. If the customer is being charged a flat rate for goods or services, state this on the invoice. A good rule of thumb is to be as specific as possible.
8. Thank your customers
Consider adding a message box to the invoice template to thank customers individually, explain important account information or offer a special promotional offer. These types of personal communications demonstrate an extra level of care on your part and help encourage repeat business.
9. Use a postage meter to increase efficiency
Sending invoices in bulk can be a time-consuming ordeal. Using a postage meter eliminates the need to make trips to the post office to buy stamps or to weigh letters and packages. Postage meters let you refill your account online at any time and easily track your mailing and shipping expenses for more efficient bookkeeping. You can also secure better USPS rates and save a great deal of money.
By taking these steps, you can make invoicing a more efficient process for you and your business.