Best Practices of Invoicing: 13 Must-Haves

What tells winners  from losers in the customer service game is usually attention to every little aspect of communication starting with marketing, moving on to sales, and winding up when the invoice is sent to the customer. To close the loop on another positive note, invoices are essential and definitely worth additional effort. Below, we will go through some steps to ramp up your invoicing and billing process and show you how to embrace automation for invoice creation, having information flowing automatically between projects and invoices.

1. Keep it simple

The first step is to keep it simple. Have a thought for simplicity and make sure all the details are available to your client at the initial glimpse. We've probably all struggled with paying an invoice at some point. Don't make the same mistake. Do everything you can to help your client navigate to making the payment in no time.

Essentially, it means not over-complicating the invoice with jargon or extending the layout to multiple pages. To decipher the meaning right-off-the-bat, your clients need an easy-to-understand invoice and preferably a short one. Only then will you be able to speed up processing and payment of your invoices.

2. Include branding principles in your invoicing

Invoices are not just a piece of paper. Quite the contrary, they should be a well thought through part of your communication strategy. Keep it aligned with your overall branding and marketing activities. Make it look like a natural part of your ongoing communication with your client. There are many great accounting tools available to make this easy and aligned with your business, incl. Xero and QuickBooks.

3. Visualize date and reference number on the invoice

The date and reference number is crucial. This makes it easier for both you and your client to navigate all the invoices going back and forth. It enables you to organize your invoices and at the same time it works as an easily communicated reference for you internally, e.g., between departments, and externally when communicating with your client.

4. Address the person and the company

Don't just include the name of the company on the invoice. For smaller clients, including a person's name works for keeping a more friendly and approachable tone. While for larger clients, it works as a means for the financial department to refer to the right person internally in case of questions or important information concerning the billing.

5. Include an "appreciation" note

Again, this links to the mission to keep it friendly. It doesn't have to be a whole novel, but simply a short paragraph goes a long way. You can personalize all of them or keep a standardized one, like "We appreciate your business.". It's up to you.

6. Provide a clear description of each item on the invoice

This is some basic but crucial information. What are we actually paying for? It's an opportunity for you to explain to your client what value you provided, and at the same time it's a great way to build up trust by having transparency in your invoicing. Additionally, you can easier answer questions later on, if your client gets back to you with a question or two.

Again, remember to keep it simple. Transparency is all about keeping things simple. It's not transparency to send a huge list of time registrations to your client. 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.

7. Include the total, due date, and terms of payment

Three crucial pieces of information to include on your invoice are the total amount due, the due date, and the terms of payment. This keeps everybody on the same page, and makes sure everything is clear for both parties. 

Commonly, unless you have a specific agreement with your client, the client will have to pay you within 30 days of receiving your invoice for services provided, as dictated by the UK rules. If you want to negotiate a payment in advance or simply an early settlement to protect yourself from delays in payment, offering your client a discount and trading it for seven days is an option. Remember that the payment rules vary across different countries too. Take two examples - for Scandinavian businesses, a payment deadline of 14 days is common, while Spanish firms set payment terms of 45 days on average.

8. Include payment options

Make it easy to pay. 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.

9. Invoice by email & request a "read receipt"

Email is one of the most stable, direct and fast methods of communication. Use it to send your invoices in seconds, and save money on postage fees in one go. "Read receipts" are supported by the most email services and invoicing tools. It's a way to inform you that the email has been received and read by the client. This can help you know if an email might not have reached the client's inbox, and thereby you can easier take action to make this happen. You can either send your invoices using a direct link to the online invoice in your invoice and payment solution, send the invoice as a PDF copy, or a combination of both. The first option being the most efficient.

10. Provide a friendly reminder before the invoice is due

Your invoice is probably not the only one your client is dealing with. Send them a friendly reminder ahead of due time. Here, you can also offer your help and assistance to answer any questions the client might have.

11. Send a "Thank You" note 

After the payment has been received, this is a nice gesture to nurture your relationship with your client, finalize this project, and suggest or offer a means of future relationship. Offer your help and make them remember your business compared to others.

12. Keep all of your invoices under one roof

Store your invoices and important information in one centralized place, e.g. a service like Xero or QuickBooks. This ensures that you always have access to previous and current invoices, and if anything goes wrong you can go back and see exactly what was communicated to your client. Keeping an organized system also allows you to look back and check whether all invoices and payments were processed correctly, and whether everything matches the agreed amount and terms. In this context, it's important to avoid one mistake companies make too often - sending a revised invoice following the initial one.

13. Automate repeatable invoicing tasks

Gone are the days when you were forced to create invoices manually time and again, in are the days of automation and less repeatable work. If you work in professional services company, manual admin tasks like invoicing can affect your company's billable hours and eat from your budget. Full-suite platforms like Forecast make sure you have information flowing automatically between projects and invoices. It reduces manual work and saves time, plus the chances of human error reduce significantly.

Remember, the invoice is often the last direct communication you have with your client, and thus you need to make sure that it's not going to be the last one. Give some thought to your invoice, make the tone of voice friendly, make it look beautiful. Don't just keep it a number's game. Current or previous clients are way easier to engage than it is to engage new leads. Keep them happy.

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