What’s In The Ideal Invoice? A Simple Guide For Tracking Business Finances
How To Create The Perfect Invoice
Every business needs to be able to maintain a steady flow of cash. The easiest way to do that is to set up a proper invoice system, where you can easily track who owes you what and when it’s due. The most successful freelancers and businesses have a solid invoice template that make collecting payments almost completely effortless. Is your invoice system complete or are there some details you overlooked?
Whether you just want to improve your invoice or want to learn how to make one from scratch, you’re going to need to know exactly what the perfect invoice contains. So keep reading to see our breakdown of what every invoice should include and how you can make repayment a breeze!
What Are The Elements Of The Perfect Invoice?
Not sure what to put in your own invoice? Here’s a list of what every invoice needs for easy recordkeeping. Make sure that there are no typos in any of these parts, as this can come off sloppy and unprofessional to your clients. An invoice serves as a reminder of the business they are hiring, and a neat, detailed one will maintain a good impression.
1. An Invoice Number
A good invoice system will assign unique numbers to every invoice. With one quick glance, it’ll be easy for you to see that it’s a different order from the others in your files. A basic rule for invoice numbering is that no two invoices should have the same number. Many businesses choose to number their invoices as XYZ 001, XYZ 002, XYZ 003, and so on.
This is just one possible way to do it. You can take it a step further and assign clients distinguishing invoices. This is especially handy if they’re repeat customers or have multiple pending orders. If you’re doing work for Jane Doe, you can choose to number her invoices JAD 001, JAD 002, et cetera. This will distinguish them from the invoices for Paul Green, whose invoices can be PAG 001, PAG 002, and so on.
Never throw away past invoices. If you’re worried about the amount of space they’ll take up, scan them instead of physically filing them, then put them in a marked folder on your computer for easy reference. This will make cross-checking super easy in case there’s a dispute about payment.
2. Your Name And Business Address
Always include your name or business name, as well as your company logo. Double-check what you put in here because some payment methods need the exact name and email address to be completed successfully.
3. The Client’s Name And Business Address
Your customers’ names and addresses should always be written on your invoices. If you need to track down your client for payment and due date reminders, this part of the invoice will show you who you need to reach and how.
4. Your Contact Details
In case your client needs to contact you for payment concerns, it’s important that you have all your contact details. Your official workplace phone number should be here, as well as your business site and the email address you use to receive correspondence.
5. The Client’s Contact Details
This is for your convenience. It can be easy to lose track of how to reach clients if you don’t keep contact records. Note the phone numbers at which they can be reached, as well as their email addresses. If there’s a specific department you need to contact, include that and the person you need to talk to for proper payment collection.
6. A Description Of The Work Done Or Goods Delivered
Every invoice needs a good breakdown of what was done for the customer. Note the quality and the quantity of the goods that you made or describe the service you performed in sufficient detail. Some jobs need particulars which need to be stated more specifically. For example, if you’re a graphic designer and you had to create a new font for a customer’s logo, you need to include that. If you’re an online writer, include the titles of the work you did, and the word count for each one.
Each item should have a separate subtotal that you can cross-reference, in case the final total doesn’t match. This transparent method of itemizing shows clients exactly what they’re paying for in every order.
7. The Total Payment Due
Even if you’ve noted the subtotals for all items due, make it a point to include the final total in your invoice. This amount should be the total before any late fees, discounts, or extras due for requested additions. These factors will be easy to compute after you present the total to your client: what’s important is that they know how much the job cost in full.
8. Terms Of Repayment
If there’s a specific payment method that you and the client have agreed upon, it has to be on your invoice. Indicate whether you accept payment via bank deposits, check, or online payment sites like TransferWise and Paypal.
If you have international clients, you need to specify the currency for repayment – that way, you get the correct amount instead of fretting about loss due to exchanges. Consult your contract with your client and make sure that all the terms of payment there match the one on your invoice.
9. The Due Date For The Invoice
This is an essential part of any good invoice. The due date will show you when the client needs to pay up and when you can start computing late fees. If payments are done by installments, this also has to be reflected in the invoice. Make sure you note the due date for each installment so there’s no confusion!
Again, check your contract to see if you have an indicated period within which the customer can pay without incurring a penalty. There should be no conflict between the due date and payment period for the invoice and your contract.
One quick tip for payment collection: don’t wait for the due date to fall before reminding your customer to pay you the due amount. Some clients simply have a lot on their mind, and a quick email before the invoice is due will go a long way towards ensuring they remember to pay. Not sure when to remind them? A week before it’s due is generally enough to let them know when to pay and if they need to request an extension for repayment!
Never Miss A Detail On Your Invoice: Use A Template Creator
It can be hard to make an invoice from scratch. There’s the risk that you’ll forget to include a crucial detail or that you lose an invoice because you’re still getting the hang of your record system. And learning how to make a good invoice can take away time that you need to complete orders and making a new one every time you get a new client can be a pain. Instead of going through all this trouble, why not take advantage of technology and use an online invoice template maker, like Free Invoice Creator.
A quick look at the template generator shows you how simple it is to make a free and downloadable invoice you can use for your business.