11-step invoice checklist to get paid faster
Small Business Guides
4 min read
Invoicing is a vital part of running a business. Without accurate and timely invoicing your cashflow will suffer. So use this invoice checklist to help you do it right.
Invoicing – more than just a request for payment
An invoice isn't just a request or demand for payment for goods or services. It's also a contact point with your customers. If you invoice well, you’ll get paid faster. But you'll also build up a better relationship with your clients.
Keep your invoices and other financial data safe using online applications
Online accounting software stores your data securely on remote servers. This keeps your invoices and other financial information safe from loss. It helps protect your business against fire, flooding, earthquakes and other disasters.
Agree payment dates and amounts with your customers in advance
A written Statement of Work is a good way to ensure there are no misunderstandings. You can provide estimates or quotations in advance for the goods or services you provide. Good accounting software can convert your quotes into invoices.
Invoice for everything – don't let anything fall through the gaps
You need to be thorough and invoice for all your costs. It's OK to give away freebies like minor expenses to generate goodwill. But do it sparingly, as your customers might expect the same treatment next time.
Let your accounting software do the hard work preparing invoices
Smart accounting software will generate invoices for you quickly and easily. It will include all the expenses you incurred when working for a particular client. This means you'll always recoup your costs when you invoice.
Ensure your invoices are comprehensive and itemised, with all the necessary details
If you want your invoices to be paid quickly you need more than just your company name and the total amount due. Be sure to include:
- Your business contact information, including name, address, email, and phone.
- Any legally required information, like tax numbers or company number.
- Your client’s name and contact information. Make sure you address it to the correct person in their organization.
- A list of the services or goods provided and the prices for each. Use clear descriptions so there are no misunderstandings.
- The quantity of each service or item purchased, then a column of sub-totals.
- The date of invoice.
- A unique invoice number. Your accounting software can generate this for you.
- Your client's purchase order or sales order number (if they've supplied one).
- If you are invoicing a foreign company, indicate which currency you want to be paid in.
- Your bank details for direct deposits. This needs to include your bank's name and address, account number, and other codes.
- Any other methods of payment you offer, like PayPal or credit cards. Be sure to account for transaction fees, so you don't lose out.
- Your payment terms, such as 14 days from date of invoice. Make sure you include the date due as well so they don’t need to work it out. People typically pay two weeks later than required by the payment terms. So make the term shorter to compensate.
- A request that direct payments include references, like your invoice number. Then you'll know who has paid.
Every invoice is a branding opportunity, so use a good design and add your company logo
Spend some time finding an invoice template that shows your business at its best. Choose accounting software with customizable invoice templates to help you do this easily.
Send your invoices as soon as the work has been completed
For healthy cashflow, invoice as soon as you can. Every day you wait means another day before you get paid. If you're on a retainer, it’s a good idea to invoice on the last Monday of the month.
Set reminder alerts to notify your customers that payment is due
Your accounting software can warn you when invoices are overdue. It can also warn when they're nearly due. Some software notifies your clients that their payment is due, which can save you a lot of work chasing late payers.
Talk to late payers politely, but be prepared to act decisively if necessary
Cashflow is the lifeline of your business. So if reminders have been ignored, pick up the phone and talk to your client in a friendly and constructive way. If they persistently fail to pay on time, you might need to consider dropping them as clients.
Build invoicing into your business workflow using add-on applications
There are more benefits to online invoicing software than simply issuing invoices. It can tie in with project management tools, inventory solutions and POS (Point of Sale) software. And all of this helps you improve your workflow.
Consider outsourcing invoice management to your bookkeeper or accountant
If you don't have time to manage invoicing yourself, outsourcing can be a good option. With online accounting software, you can give secure selective access to your bookkeeper or accountant. You can still see every transaction at a glance.
Invoicing is one of the most important aspects of running your business. So take the time to get it right. Your cashflow will be much healthier as a result.