Writing invoices can seem like a daunting task. What information do you include? How do you make sure payments are sent on time? How do you track invoicing documents? In order to do all of these, each invoice must include these 5 important things.
- Company Information
Every invoice needs to contain company information. The rest of the info on the invoice is moot if there’s no way to track who sent it and who it’s for. All invoices must include the name, address, and contact information of both the sender and receiver. Additionally, the invoice needs a tracking number. Even if your business does not send many invoices, the one receiving the invoice may have more documents to organize. Having a tracking number helps avoid confusion when dealing with more than one invoice or when looking for older documents.
Invoices should contain multiple dates, including:
- Date the invoice was sent
- Date the product or service was rendered
- Deadline by which the payment must be received
These dates aid in tracking and coordination of invoices and payments. Clients will be checking these as well, so having accurate date tracking is key. With dates especially, invoices both depend on your record-keeping and are a part of that record.
- Payment Methods
An invoice is pointless if the receiver does not know how to pay. Always include a description of payment options and how to use those options. This ensures you will receive payment in a format that is ideal for your company and makes it more likely that clients will send payments on time.
While receiving payments in one specific manner may be easiest for you, having multiple options is key. Some clients may be unable to use certain payment methods. So while other methods might be less convenient for you, having many options is more client-friendly. So before limiting what payment options are on your invoices, think about what works best for your clients.
- Monetary Breakdown
Always include a detailed breakdown of the invoice charges. The party receiving the invoice will need to know what they are paying for, and the party sending may need to track inventory numbers. Making sure these calculations are detailed and accurate also ensures the correct amount is paid.
Make sure that the items being charged are adequately described. Write a short summary of each item so that both parties know exactly what is being charged and why. This will ensure charges are not duplicated on future invoices.
- Terms and Conditions
Terms and conditions serve many functions, but ultimately, they protect your business and ensure that the details of the payment agreement between you and the client are understood. Terms and conditions can include a wide variety of items, such as:
- What happens when a client cancels a payment
- The consequences for a late payment
- What types of currency are accepted
- Terms specific to certain payment methods
- Benefits for clients who pay early or are loyal to your business for many years
- Payment plans
Payment terms and conditions are not legally required, but they are legally binding. If a client breaks the terms and conditions that they agreed to, you may have legal recourse. Terms and conditions can also help protect your business against legal action from clients. Before writing terms and conditions, it is beneficial to research the laws of your area to see what protections and regulations apply to your business.
Don’t Worry – You Only Need to Write ONE Invoice!
The great thing about invoices is that you only need to write one. Ever. Once you have an invoice, you can copy the formatting, terms, and conditions, and your company information into a template. Then you can customize monetary amounts and dates on a case-by-case basis. Remember to update the template, especially the terms and conditions, as necessary. A yearly review of the invoicing template will keep it up to date.
These 5 important things need to be included on all invoices. Additionally, always write an invoice in the language you are certain your clients will understand (don’t use too much jargon). Invoices that don’t include these 5 items will be harder to enforce, harder to track, and will make clients doubt your professionalism.