How To Invoice Clients Effectively
A vital piece of the Credit Management jigsaw is how to invoice clients effectively. If you don’t you are leaving yourself open to disputes, excuses and late (or non) payment.
- Invoices should be: Clear, concise and precise. If you include the correct and relevant information on invoices you reduce the likelihood of problems later.
- Timing is Critical. To invoice clients effectively, invoices should be raised and issued to your customer as soon as they possibly can after the goods or services have been delivered / completed.
A big mistake many small companies make – which can drastically affect their cashflow – is to only invoice when they get round to it, as they are “too busy”.They then complain when a customer does not rush to pay their bill, (despite it being issued late in the first place).
- Invoice Detail. Invoices should contain a summary of the goods or services, and an order number if applicable (some clients may insist on this to match their systems), a breakdown of costs (if several items), a total cost to pay, and where applicable a tax breakdown. If a pre-payment or deposit has been made – this should be shown / deducted.
- Invoice Numbers. Invoices should always have a unique numbering on to refer to, and should be dated, when issued.
- Company Information. Another vital factor is that they should include all your statutory and relevant company information, details of how the client can pay, and the agreed terms that you have with that client or a deadline as to when the invoice should be paid by.
- In case of queries. Invoices should also include contact details in case there is a query with the invoice.
- Check who authorises payment. Always make sure that invoices are sent to the right contact at your client, particularly when dealing with a larger client. You may need to consider how to invoice your clients effectively at the point of sale because often the person who signs off payment of invoices is not the contact you may have dealt with (ie. The buyer)
Recommended Further Reading:
Collecting Your Fee: Getting Paid from Intake to Invoice by Edward Poll
Effective Credit Management Tools
Chasing For Payment
Payment Terms Definitions
Work At Home
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