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Best Practices of Invoicing: 12 Must-Haves

Invoicing is the final step between delivering the service or product and receiving the payment from your client. Ironically, this crucial step is often neglected from the strategy and thought that goes into analyzing and deploying the best possible communication strategy for your business.

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. A current or previous client is way easier to engage again than it is to engage a new lead. Keep them happy.

Below, we will go through some steps to ramp-up your invoicing and billing process. We've also included an example of an invoice at the bottom incorporating some of the steps listed here to give you an idea of how a simple, personal, and well-structured invoice could look like.

1. Keep it simple

First step is to keep it simple. Have a thought for simplicity and make sure all the details and information is available to your client by 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 do the payment in no time.

2. Include marketing and 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. Have date and reference number clearly visible 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 makes you able 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.

Remember though to also 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.

8. Include information about the payment options and 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. Send the invoice by email and 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 saved and accessible in an organized system

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.

These are some of the steps we would recommend to take moving forward. If you're really looking into nailing your invoicing, billing and accounting setups then look no further. We have an article going more in-depth with the benefits of a connected system, how to actually do the setup of an efficient and organized system, and all the possible benefits and potential drawbacks of implementing a digital accounting solution, click here.

invoice-mockup

Kasper Nymand
ABOUT THE AUTHOR | Kasper Nymand
Yello! I'm Kasper, and I'm doing Marketing at Forecast. Apart from that, I enjoy experimenting with various projects to see where my imagination brings me.
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