It can be full of pitfalls, particularly if you haven’t raised and managed invoices before. So today, we’ve put together a beginner’s guide to invoicing to help you through the process.
What Should Be In My Invoices?
Before you send an invoice out to a customer, you need to make sure it has all of the right information on it. This is a really important step, and worth spending an extra few minutes checking. If you miss something out, or some information is wrong, then your customers could easily avoid paying, delay paying or even think they have paid when in fact they haven’t. While there are some more individual details you might need to include in your invoices, you should make sure you have included:
- Your full name
- Your business name
- Your address
- The invoice date
- The customer’s name
- The correct customer address
- A delivery address (if it’s different from the above)
- The customer purchase order number (if provided)
- A clear description of the goods or services supplied, including dates provided
- Accurate quantities, prices, discounts and the correct total amount
- Payment terms and a due date
- How and where payment should be made
- Your VAT registration number (if applicable)
It’s worth also mentioning that if this is the first time you’ve worked with a new customer, you should ask them what they need on the invoice in order to approve them. You may find out that they only pay invoices on a certain day, which means you will need to raise them on a certain day, or that they require a certain piece of information in order to process the payment. By asking this simple question, you can avoid a lot of confusion and late payments.
How Should I Send It?
The next question becomes, when do you raise your invoice and how do you send it? The answer to the first part is simple – as soon as possible. In most cases, this means as soon as you have provided the goods or services. If you operate on a ‘pay in advance’ schedule, then you need to ensure this is agreed with the customer and they know when they should expect your invoice.
Once you have raised your invoices, they should be sent to the customer right away. For most, this means email – which is the more common way of sending invoices. Other options include first class post, or slotted into the packaging of the product in an obvious and easy to see location.
What About Disputed Invoices?
Of course, not all invoices will be smooth sailing. If a customer disputes your invoice, or doesn’t pay, then you need to have a policy in place for investigating and resolving it. Don’t put off dealing with these issues, as they will only get worse. Leaving disputed invoices will often result in escalation, making it much more difficult to resolve. So it’s important to tackle these things head on. You should also remember that withholding payment is often used as a tactic by customers over minor issues. These are usually small things that can be solved with a simple phone call, so it’s important to reach out and attempt to resolve it quickly.
Disputes are always difficult to navigate, which is why it’s important for you to keep records of all information relating to the dispute. This includes copies of the invoices, any correspondence and documentation around the agreement and invoice. This will give you a backlog of evidence to encourage payment, which is a useful bargaining tool if the dispute goes further. Finally, make sure you log all details of the dispute in the client’s file, so that you can use it to identify any trends and perhaps even the root cause of the disputes.
At Debtcol, we help you not only collect payments that are overdue, but understand the entire invoicing process and how to handle disputes over invoices. Our specialist team work with businesses on an ongoing basis to manage their invoice and payment processes and collect on overdue payments. If you would like to find out more about how we could help you, just get in touch with us today.