Invoicing can be a painstaking process.
For those who’ve had difficult clients in the past, it’s especially frustrating…as it seems as though anytime after the invoice is sent, communication slows and becomes muddled.
Proper invoicing techniques will not only help ensure you get paid quicker but to the terms that you establish that ensure your business is running smoothly. This is really where the value of your work is captured, which is why it’s such a staple part of the business process. And to help ensure you’re getting paid fair and square every time, we’ve compiled a few tips on the best invoicing practices. Check them out below:
Have Your Terms Written Out In The Contract Beforehand
Before you even write-up your first invoice, it’s important to have all the specific terms in your contract beforehand to ensure you’re getting a fair shake. Depending on how you’re pricing out your services, there are a number of different items you should include to cover your bases, such as:
- The allocation of time or services in accordance with your price. For example:
- Charging per hour/month/week
- Charging per item (I.E.: A logo, financial audit, or article)
- Cancellation terms (for example, giving a two-weeks notice)
- Costs to be reimbursed by the client
- Late fees
- Special circumstances that require higher fees (for example, rush delivery or on-call fees)
Although there are certain general consulting agreements you can find online, it’s best to go over with a lawyer the specifics of each deal you’re aiming to compile. Not only will they be able to point out things you may have overlooked, but position the language of your contract to ensure all the necessary provisions are covered.
Include All The Basics
Once all your parameters for working are set, it’s time to map out what needs to be included on your invoice. Here are some of the most common:
The Date It Was Created and Sent
This helps with organization, as well as initiates when you’re allowed to consider the invoice ‘late’. Usually placed at the top-right corner of the invoice.
The Due Date
Another pretty straightforward term, the due date is determined by your contract, whereas you can state it’s due immediately (often written as “due upon receipt”), or due in 30, 60, 90 days, etc.
Your Business Name and Address
Usually placed at the top left corner, your business name and address help identify who you are.
Customer Business Name and Address
Under your business name, most people place a “Bill To:” followed by their business name and address.
Reference Numbers
A reference number is helpful in organizing and keeping track of your invoices (especially if you send multiple to the same client). One helpful way to write it is the date (I.E.:0810 for August 10th), followed by a keyword, then the serial number (I.E: 001, 002…so you can invoice multiple people on the same day regarding the same project). Finally, this also enables you to assign a unique ID to clients to ensure that sent payments are matched properly.
The Services Or Products Charged
Just as you would see on any other receipt, an invoice always includes the services/products provided, cost per item/hour, any multiplier rates, or extra fees. It’s important to be as detailed in your itemized services/products as possible to help avoid confusion from the client.
Bank Details/Multiple Payment Methods
This is perhaps the most vital part.
Whether you’re getting paid via check, ACH, PayPal, or cryptocurrency, it’s important to list out the necessary information you feel comfortable transacting with your client. By giving them multiple ways to pay, you’re able to both get paid quicker, as well as leave them with fewer excuses if they aren’t as trustworthy as you initially imagined.
Late Fees/Other Notes
Finally, most invoices have a section under your charges for terms of late fees or other miscellaneous notes. If there was a special circumstance where you had to charge more for something uncommon, this would be the place to map out your reasoning. Especially if you envision this invoice to be used in court, getting a thorough explanation upfront will be crucial to proving your case later on.
…having to chase clients for money usually doesn’t make them good clients… this is your livelihood we’re talking about here…
Be As Thorough In Your Explanation Of The Charges As Possible
Even for your regular charges, it’s necessary to map out everything you did. No matter if it’s the title of an article, the time spent on a section of work or an item bought to be reimbursed on, every itemized section needs to be as thorough as possible. Details as small as number of square feet of a product for a contractor can make all the difference, which is why you need to map out everything to a T so there are no disputes.
Send It Off ASAP
Once your invoice is drafted up, it’s time to ship it off. Regardless of the due date, invoices should always be sent as soon as possible. This sets a standard for client expectation, as well as avoids your invoice ‘getting lost in the mix’ during other conversations. Instead, have that invoice to the client right when a project is finished, ensuring you’re starting the payment process started right away.
Timing of invoices can also be added into the contract before hand. For some service industries, it’s common to bill for time worked each month or week. Make sure that is ironed out in the contract and agreed upon. Frequent billing is beneficial if there becomes collection issues. The sooner you know this, the better.
Track If They’ve Viewed/Read It
A smart strategy for invoicing is having a system with read receipts in place. Whether it’s handling all of your invoices directly through PayPal or using an email tracking system like Mailtrack, having something there to see that a client has viewed/acknowledged your invoice is helpful for both following up as well as proving receipts if things ever become ugly. Especially if you’re wondering when to time a follow-up, there’s no better opportunity than right after a client has viewed it.
Be Firm, But Polite In Your Follow-Ups
Having clients pay you can be a lengthy, frustrating process. Often, people find themselves afraid of asking to get what’s theirs, fearing that they’ll alienate themselves from future work. For one, having to chase clients for money usually doesn’t make them good clients. Second, this is your livelihood we’re talking about here, which is nothing to take lightly by yourself or others. And finally, it’s not worth the ROI to stress over bad clients, usually spending more time worrying about getting paid than on the actual project itself. However, that’s why regardless of who the client is, it’s good practice to remain firm, but polite in all your follow-ups.
Getting paid is about not letting clients think they can put you on the backburner, which requires a certain amount of assertiveness. Remember, you’re still able to friendly, show manners, and most importantly, be a pleasant to work with while still asking for what’s yours. A smart tip is to keep your message concise; for example, “Hey. I saw you had a chance to check over the charges on the invoice. Would you happen to have a payment date?” is a direct way of ensuring the client is getting charged fairly while you’re going after a direct answer. It takes some practice (and even the best of us get it wrong sometimes), however, is well worth getting in the habit of, ensuring you’re getting paid from quality clients every time.
Want an accountant that supports your mission?
Your financial wellbeing is only part of the equation. Stand firm knowing your accountants back your organizations values, goals, and team, too.