Invoice to impress
You know how to make an impression with clothes, but what about invoices? Matthew Nolan shares some tips that will ensure your invoices get noticed and paid on time.
Invoices are the most important document your business issues. They convey professionalism to your clients and have a massive influence on when you'll get paid. Yet many businesses fail to set out even basic details on invoices and suffer problems such as poor cashflow as a result.
If an invoice doesn't spell out the terms of your business, your clients will dictate them to you instead. Overdue payments from clients can be chased, but that's a task best avoided by issuing an appropriate invoice upfront. So keep your business in the black by making sure these items are included on all invoices:
Seller details
Include the name of your business, ABN, address and contact phone number for account enquiries.
Client details
Detail your customer's business name, ABN and address. Also include details of the delivery address if it's different from the main business address.
Name it correctly
Most invoices issued will be a 'Tax invoice', so remember to use this term at the top of the invoice when relevant.
Date
Date the invoice as early as possible. At the latest this should reflect the date that the goods were despatched.
Identification
To eliminate any chance of having an invoice confused as a copy of another, have a unique invoice number on each invoice issued.
Description
Provide a description of the goods covered by the invoice, including sufficient details so that the goods can be identified after delivery.
Cost breakdown
List each of the costs included in the invoice, such as products, freight and GST. Also provide the total amount due at the bottom of the invoice.
Due date
Make sure you clearly state a due date for receipt of payment. This should be linked to a time period since delivery of the goods, and can range from COD upwards.
Payment method
Let clients know your preferred method of payment, which will ideally be a direct deposit of funds into your business bank account. If this is the case, remember to include the account details such as account name, bank, branch, BSB and account number as appropriate. Other payment options can also be listed if desired.
Penalties
Make sure your customers have an incentive to pay on time. You're not trying to be a Bank, so there's no need to lend your clients money longer than agreed - at no cost. A clearly stated late payment policy puts clients on notice regarding the extra fees and will increase on-time payments. For some clients you may choose to waive this fee when incurred, but at least by detailing it you now have the option.
Stand out
Consider printing invoices on brightly coloured paper to make them stand out from the crowd and be easier to find amongst the pile of other invoices.
Sending an invoice
Make sure invoices are sent as soon as the goods are despatched, or earlier if possible. Sending it electronically directly to the client's accounts area will ensure it not only arrives quicker, you'll also have a record of its delivery.
Statements
To remind clients of any outstanding amount, it's prudent to issue monthly statements that detail any payments owing or received, as well as highlighting any overdue amounts.
Invoices are an important method of communication with your clients, so keep your credibility and avoid being taken advantage of by invoicing appropriately.
By Matthew Nolan