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BizReport : Internet Marketing 101 : December 19, 2019

How to Invoice like a Pro

Here are some of the things you need to know to improve your invoicing procedures.

by BizReport

It's not easy being a small business owner and the financial paperwork that it entails can sometimes be as challenging as the work itself. You've probably already had the experience of playing the cat-and-mouse game of tracking down late payments.

You want this process to go as efficiently as possible, since no one is paying for the time it takes to compile invoices and reminding clients to pay what is owed.

Here are some of the things you need to know to make your life easier.

Invoice vs. Receipt

The invoice is given to the client before they actually pay. It lists the goods and services provided and calculates how much they owe you for time, work, and materials. So, if you're a graphic designer, for example, you invoice the time it took to make the graphic and, if you had to buy any photos or templates, you'd include that as well.

A receipt is issued once the invoice is payed as proof of the transaction.

What Does an Invoice Have to Include?

To avoid any misunderstandings or complaints, you want your invoice to be clear and detailed.

It should include:
- Your company name, client name and address
- The date at which the invoice was created
- Date and description of products and/or services, price for each and quantity
- Any fee paid in advance such as deposits
- Special rates or bonusses you offered the client
- Sales tax
- Any late fees or other penalties if this is a follow-up invoice
- Terms of payment - due date and method such as within 30 days through deposit in bank account

How to Create Invoices

To generate invoices you can use accounting and bookkeeping software or invoice templates for small businesses. Whatever method you choose, you need to make sure they have all the essential information listed above and that it looks professional. This way you increase your chances of having repeat customers and building a good reputation.

Invoice Etiquette

First of all, the information presented through your invoices should never be surprising to your clients. Everything they contain should have already been discussed during the preliminary negotiations.

If a client finds any hidden costs, they'll lose trust in you and probably take longer to pay.
You also need to make sure you provide contact information in case they have any follow-up questions. The faster they can get in touch with you and you get the chance to address their concerns, the faster they'll pay the bill.

Another important factor is making the process easy by including a variety of payment options. Most clients tend to have a preferred payment method so if you're flexible and can accommodate them, they'll be more inclined to collaborate with your company in the future.
For larger, more time-consuming projects, don't be afraid to ask for a down payment. This will cover your expenses while you're working and protects you from any consequences of late payments. Asking for a 50% deposit is quite commonplace so your clients have no reason to be offended. You'll come off as someone who knows how to handle orders of this size.

Image via Shutterstock


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