Invoicing best practices Moxie Help Center

If these projects take longer than expected, there could be cash flow problems. Similar to an invoice, a bill contains a lot of the same information, and sometimes people use these phrases synonymously. The context is what really distinguishes an invoice from a bill. A bill typically contains an expectation of quick payment, while an invoice indicates a grace period.

An invoice is a document received from a vendor or supplier for goods and services. Depending on the type of business you have, you may use a procurement system in your business using purchase orders, or you may simply purchase a service or item directly. Perhaps your company has been operating for a while, but it’s time to consider innovative ways to optimize client billing. Typically, you would open an invoice template, enter it into your email account, and begin typing. However, there are other factors to consider before mailing an invoice.

Automation

Come and learn with us how to make an invoice in Excel using this ultimate guide. Browse hundreds of articles, containing an amazing number of useful tools, techniques, and best practices. Many readers tell us they would have paid consultants for the advice in these articles. Once an invoice is received in your business, it should immediately be matched with a purchase order and shipping receipt, if both are available.

Many business experts believe that 30 days is the standard for invoicing payment terms. However, you could extend these terms to 60 or even 90 days if required. In fact, Forbes reported that invoices that are sent the same day that the project is completed are 1.5 times more likely to be paid. To get the most out of your time tracking, use an automated time tracking software. BQE CORE’s time tracking software is featured in our all-in-one dashboard. Without proper time tracking, hours worked on a project are in the dark and you may even miss out on some extra billable hours.

Your client doesn’t care about each individual item, and the most problematic factor, they don’t actually know what work they got done for it. Instead, sum up your items to one or just a few items, e.g. completed milestones. Include a statement to the effect that “A Late Fee of x% may be assessed on past due balances” if you ever want to enforce such fees.

Reconcile accounts promptly

But your terms are only as valuable as your enforcement of them. It’s best to send invoices to your customers soon after you meet or deliver your services. That both allows you to get paid more quickly and puts the invoice on their to-do list while you’re still top-of-mind. While your invoice should ideally be tailored to your business and brand, it’s important to prioritize getting key information across to your client.

In this context, it’s important to avoid one mistake companies make too often – sending a revised invoice following the initial one. Each payment option should be easily found and understood on the invoice. Make it as easy as possible for both you and your client to process the payment. Maybe include an online or mobile service to make the payment in a matter of seconds using a credit card or bank account. An example could be a simple URL address and maybe a QR code linking to a payment service in the web browser or through an app. Keep track of key performance metrics, such as invoice processing time, days sales outstanding (DSO), and payment collection efficiency.

Are there any templates available to create an invoice?

To mitigate this issue, send payment reminders, offer early payment discounts, and consider using an escrow service to secure funds. Select software that integrates seamlessly with other tools used in your business, such as project management, time tracking, and CRM systems. This will help you maintain a centralized and organized workflow. You can forward all your supplier invoices to a dedicated Qonto email address.

The ability to access talent from around the globe and the flexibility to adapt to different time zones and working styles can give small businesses a significant competitive edge. As we mentioned earlier, companies are legally obligated to keep their invoices for 10 years. Any tax agent can request these documents in the event of an audit (especially when it comes to justifying your deductible VAT). It is therefore essential that you store and file your invoices in one centralized place.

Summing Up: Best Practices for Invoicing

With a Bonsai account, you can access our extensive library of templates and invoicing tools to send billing requests quickly. Regarding billing clients, here are some of the invoicing best practices you should follow to simplify the process and get paid on time. First, we always recommend you use a software for the invoicing process. Proper invoice processing also reduces the risk of running out of money and ensures that invoice payments are sent on time.

Currency fluctuations can affect your profit margins and create confusion in invoicing. Consider billing in your home currency or use a fixed exchange rate for a specified period. The cloud makes it easier to implement a segregation of duties (SoD) strategy, which can help prevent fraud and errors in financial transactions. The goal is to give you greater visibility of outstanding bills, optimize your cash flow and bookkeeping prep.

• And for some sectors – like retail – the growth and long-term sustainability of your business depends on how well you work with your suppliers.
• BQE CORE’s time tracking software is featured in our all-in-one dashboard.
• This could be a PO or Job number or supporting documentation such as a signed receiving document (proof of delivery) or approved timesheets.
• When sending invoices to clients, the best thing you can do is to take all of the work off your plate and automate the entire process.
• The goal is to give you greater visibility of outstanding bills, optimize your cash flow and bookkeeping prep.

There are various types of payment terms you can use to expedite payments. Learn about the different types and determine which ones best suit your business. Do some research on payment terms that are effective in your field, and try out a few to see which ones work best.

Paper is no longer helpful because bills go missing, duplicate bills are sent, and other problems make it hard to enter data. Tools for automatic invoicing can help your business save money and work more efficiently so you can meet your client’s expectations. When a customer disputes an invoice, it can cause the entire invoice process to be delayed, costing you both time and money. Ensuring they understand their bill thoroughly will assist in avoiding any conflicts or disagreements.

What Do You Do When a Customer Does Not Pay an Invoice?

Consider the client’s budget and expectations while drafting an invoice. The client should be able to comprehend the business and terms at the beginning of the contract. Rebecca Hey is a content writer specializing in SaaS, digital marketing, eCommerce, lead generation, SEO, website hosting and website development.

Call it an invoice, and ensure the client understands what it is and what is expected. One of the best things you can do for your business is to move towards complete AP automation, starting with invoicing. Once you see how much time, money, and labor costs you’ll save, making the switch to complete AP automation will soon follow. But even if you’re still using manual systems, these are the reasons why establishing a solid strategy for processing invoices is essential. One of the best ways you can build lasting relationships is to pay your invoices on time.

If you’re not careful, a disorganized payment process can cause many problems, like late or missed payments. To avoid these issues, make sure your payment process is well-organized and efficient. That way, you can reduce Invoicing best practices headaches and build trust in your finances.To invoice a client effectively, create a clear and easy-to-understand invoice. Make sure they can see who they need to pay, how to make the payment, and the total amount owed.

Near the top, the invoice should include your name, address, contact details, and company registration number.If you have a formal letterhead for your business, use it and make it prominent. If you send payment requests late, your client might not even remember the transaction. For example, if a customer disputed an invoice, it would take time and cost you money.

But it’s not just the cost benefits we all enjoy; it’s payment processing speed, convenience, and ease of use. Plus, valuable business services such as automatic payments are readily available too. With us in your corner, you can focus on growing your business and receiving payments from your US clients.