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When I used to run my own business, invoicing was my favourite part of the job. (Hey, I am a capitalist at heart). I liked how the invoice made a job seem final, and I loved seeing the money appear in my bank account and knowing it was from another satisfied client.
That is, when people bothered to pay me. Because my least-favourite part of work was chasing up unpaid invoices, and I had to do that a lot. It seemed as if my clients loved my work up until the point when they had to pay for it, and then they went AWOL.
If you’re a small business in the same boat with chasing up unpaid invoices, here are five things you should include on your small business invoice to help you get paid faster:
1. Your contact details
Often, by the time an invoice reaches the right department at a company, it has become separated from the details of the job. There are often details that need to be checked before an invoice can get paid - and scrambling around to find a contact number is just one more step standing in the way of you getting paid.
So put your details prominently on the invoice, in big bold letters so they’re easy to locate. Make sure you include the name of the correct contact person at your company.
2. Payment Information
It sounds simple, but so many people forget this little detail. I recently built a house, and I had to repeatedly chase up the plumber and gas fitter because they would hand-write out their invoices and forget completely to put in their bank account number. It’s very difficult to pay people when they don’t tell you how to do so.
Make sure you include the name of your bank in the payment details, as many online banking inputs require this.
Another great option if you send your invoices online (for instance, through a system like Xero or WorkflowMax), is to include a ‘PAY NOW’ button for your credit card provider or payment gateway. Now your customer can pay your invoice as soon as they receive it, and research shows that this PAY NOW system will dramatically decrease the amount of time it takes you to get paid.
3. Some terms and conditions
Confession time: who here pays invoices as soon as they receive them?
I don’t see any hands in the air? Not even my own.
We all put things off, especially things that involve us parting with our precious money. That is, unless there is some kind of incentive for getting that bill paid immediately, or some kind of punishment for avoiding it.
If you want to get paid faster, you need to give an incentive or a punishment. That’s where your terms and conditions come in. You need to clearly print out what date payment is expected. You can choose to either provide a discount for paying before that date (incentive) or a late-payment fee if payment is received after that date (punishment). Make sure to spell everything out clearly and check with your legal team before you introduce your T&Cs, just to make sure you’re not getting yourself into trouble.
4. An invoice / reference number
Every invoice should have a unique number - and it’s your job to keep a record of the invoice numbers and which jobs they relate to. It’s important that you don’t duplicate these numbers.
Why? Well, say you have a client who you do regular work for. So throughout the year you might be sending them 20+ invoices. If there’s a problem with one of the invoices, both you and your client need to easily be able to find that invoice, dig up the information on the job it relates to, and match it to each other’s numbers.
Invoice numbers could be sequential numbers or they might include letters or multiple parts if you use progress invoicing (eg. INV-102-A, 102-B, 102-C for three payments on the same job).
5. A breakdown of costs
It’s important to be upfront and transparent with clients about exactly what they’re paying for. This is just another way your demonstrate your value to them. Rather than listing the job as one lump sum, break out the costs into separate items, so your client can see exactly what they spent where.
Invoicing doesn’t have to be a hassle and time-suck at your company. There are plenty of clever apps to help you make invoicing a breeze. (If you charge by time, then WorkflowMax is a great solution).
Check out some more great tips on invoicing in these articles:
- How WorkflowMax’s Invoicing Tool generated a 10X ROI for one creative agency
- Think your invoice is boring? There are the top 25 beautiful designer invoices you’ll fall in love with
- Want to get paid faster? You need to be invoicing in the cloud