It’s vital that as a small business owner you get your invoices right. That may seem obvious, but we know from research that a large percentage of invoices are submitted with mistakes on them and if an invoice isn’t correct there will be the risk that your payment will be delayed and sometimes not paid at all.
There may be different, specific things to remember about invoices that might apply to your own business, but there are some important, general points that should apply to almost everyone:
1. You need to know who to send the invoice to. The person who gives you the work may not be the person who pays you. In smaller firms there may be only one person to commission work and pay the invoices, but bigger firms are more likely to have more complicated payment and approval processes
2. You need to know when you will be paid. Some firms pay in 30 days but they mean 30 days after the end of the month in which your invoice has been submitted. Don’t get caught out and get from the customer the date on which you can expect your money to arrive in your account
3. Keep your invoice template as simple as possible but make sure you include everything that the customer needs to make the invoice payable
4. If you’ve need a purchase order number for your invoice chase that as soon as the work’s been done. If there are delays in getting that number that will mean the invoice is submitted later than necessary and payment will be delayed in turn.
5. Submit your invoice as soon as possible [after work is completed], in line with the contractual terms you agreed with your customer. It’s tempting to wait until the end of the month and do all your invoices at once but that could leave you short of cash while waiting for several payments to come in
6. There will be some information that you need to include on every invoice as a minimum, including:
- Invoice date
- Invoice number
- Purchase order number (if you’ve been given one)
- Payment due date
- Payment terms, as agreed in the contract
- Bank account details
7. Your invoice should set out clearly the work that has been completed and what the payment relates to. If a significant piece of work has been broken into sub-tasks, specify those tasks as well
8. Check that the quoted figure on the invoice matches what was agreed before work began
9. If you’re comfortable accepting more than one payment method, make clear what the alternatives are, eg credit card or PayPal payments. Make it as easy as possible for the customer to pay you
10. Try to build a friendly relationship with the person responsible for paying you. You want to be the person who gets paid before they go home on a Friday. Call them the week before your payment is due to make sure they have everything they need and your money will come through on time.