For those new to the world of business, an invoice is a critical financial document that requests a payment from a customer or receiver of goods or sales. Official payments cannot be processed without the presence of an invoice. Basically, this slip of paper lists down all the services or goods rendered or delivered to the one receiving the goods or services you have provided. This can easily be confused for receipts as they may contain similar information. The latter however, is a confirmation that payment has been made.
A typical invoice would list down all the products or services rendered called items (and the details), the estimated amount, the rate, and the dates completed for each or for all items. Invoices are issued as soon as a service is completed or upon the delivery of products. Some companies issue e-invoices which are sent through email. This is common amongst credit card or online transactions. Invoices are also the bills customers receive for utilities like electricity and water bills.
However, if you’ve just started your business, creating invoices can be quite confusing and even overwhelming once the demand starts to pick up. That is why some entrepreneurs use invoicing software to generate invoices easily and efficiently. But with or without technology, it is important to do your invoices right and right away. As a caution, here are some invoicing mistakes that you might want to avoid to prevent delays in getting your payments.
Putting incorrect information
This is perhaps the most common mistake noted down in invoices. Wrong information can create such a huge setback in getting paid. If you get the wrong names down, your invoice could end up with the wrong person. If it has missing information, like not having due dates, it will be difficult to collect payments from your customers. If names or addresses are spelled incorrectly, then there is a chance of not even getting paid at all.
Pay particular attention to the information you put in an invoice. From the company or customer name to the address and due date, these little details will matter a lot. If you are asking to have the payment deposited to your bank account or online account, make sure that your account number is correct. Payments deposited to the wrong account is the last thing you want to happen to you.
Not being specific enough
Sometimes, invoices are downplayed so much that particulars for each item are not listed properly or not listed at all. For example, some invoices will just write “1 feature article”. In addition to that, the date and/or the rate could even be missing. As such, vague items can cause misunderstanding and miscommunication between the client and service-provider. The reason is that general terms can be open to various interpretations.
Being more specific can help answer this issue. It can actually be quite cumbersome but this prevents misunderstanding from both parties. It would be good to have the item name, details of the item, the rate given, the quantity, the date completed, serial number if available, and the total amount per item.
Lacking a professional look
If you think looks don’t matter, think again. When it comes to invoices, how it looks does make an impact. Credibility and professionalism is the name of the game. Of course, a customer will want to give his money to a business we could trust. In a world where scams are so common, it is important to have all the important elements that will certify that your invoice is true and real.
To do that, make sure that your invoice carries your business’ official logo and name, business address, contact number, email, and website. A business permit number and/or a serial number offers a big plus in terms of trustworthiness and professionalism. Also having a header or footer bearing some reminders on payment is also helpful for customers.
Remember that creating an invoice should never be done haphazardly. Details should be written or indicated properly and presented in a professional manner. Prepare blank invoice templates to make the task easier or use an invoicing software to make the job easier.