Invoicing is a major business process. It is the part where you as the seller send an invoice to the buyer for goods or services sold to them. This invoice lists down these goods and services as well as the total at the bottom. It is an official business document that indicates the terms and items involved in a transaction. For those who are starting a business, here are a few tips about invoicing that can help you out immensely.
Ensure that you track the time frame of the invoice as accurately as possible
Some businesses charge per hour for their services. An example of such a business is a legal consulting firm. The lawyers and attorneys there charge per hour for their services. These hours and the charge per hour must be indicated in the invoice. Thus, it is important for you to measure and track these hours correctly. Ensure that you set a timer for whenever you are discharging services. Set it on when you begin and set it off once you are done. Note down all the hours that you work on a client’s case. Copy these notes to the invoice when you charge them. In this way, the information that you indicate in it will be accurate.
Ensure that you follow up on invoices that you issue to your clients
It is important to track the invoices that you send out. Do not just send them and forget them. Ensure that you follow up on them politely but firmly. Invoices can be forgotten, ignored or even forgotten in the mailbox. If you send them by email, they can easily get forgotten in the spam email box. Thus, ensure that you contact your clients and follow up on the invoices that you send them. Ensure that they open the emails, read them and respond back to you in time.
Always remember to make time for invoicing activities
According to studies, invoicing can take up 10% of your business administration time. The activities of coming up with invoices, sending them and following them can easily take up this a lot of time which can be used in business administration. As a result, your other administrative work may suffer. Thus, ensure that you budget for invoicing activities while you divide your time at the office.
Ensure that you send invoices to the right parties
One of the most important parts of an invoice is the billing address. It is very important to send this document to the right billing address. This ensures that it falls in the proper hands every time. If it ends up in the wrong office on the wrong desk, it can stay there and cost you time and money.
You can invoice from almost anywhere
You don’t have to wait until you are in the office to issue an invoice. You can easily do this from almost anywhere. As long as you have your computer, your tablet or a Smartphone, simply use it to send invoices over the Internet. Some of the spots where modern professionals send invoices from include the trains, airport waiting areas and even while in the great outdoors. One of the most beneficial Internet resources for this purpose is the Cloud accounting software. Ensure that the space of time between completion of your task and the issuance of an invoice is very short. This way, you are more likely to get paid faster.
Types of invoices
It is very important to know the types of invoices that exist in the world of business. There is a special type that is used for binding the seller and the buyer in a transaction without involving any accounting processes. It is a preliminary invoice that indicates the set duties of the seller and the buyer so as to define what every party is supposed to do. It also indicates the liabilities of each party. This type of invoice is known as a Proforma Invoice.
When and how a proforma invoice is normally used
A proforma invoice is simply an indicator of transactions that are occurring across a border. This type of invoice is normally used by the customs agencies. These agencies use this type of invoice to assess the taxes and duties that they are supposed to charge the seller whenever they are shipping to a different country or state. In this situation, the seller is able to know how much they should charge the buyer by using the percentages indicated by the customs agency on the proforma invoice.
In this business process, the invoice acts as a record that can be transferred to the department that handles the accounts payable for the purpose of establishing standard billing invoices. In a proforma invoice, the goods that are there are indicated in a format known as a widget. Each good or service that is included in a proforma invoice is known as a widget. Both the cost and the number of widgets that are involved in the agreement need to be indicated in this invoice. Other information that should be included in the document includes; the number of boxes, total weight of boxes as well as the units that should be used to measure these boxes. Every proforma invoice should always have a statement indicating that it is not a VAT invoice.
How to get an invoice paid faster
Once you send out an invoice, you expect to get paid as soon as possible. Sometimes, this is not the case and the payment gets delayed or even forgotten. So there are strategies that you can use to get paid faster. They include:
- Setting overdue fees
- Communicating with clients or buyers
Setting an overdue fee
Every invoice has terms of payment. They are clearly indicated on it. You can include overdue fees in these terms. These are extra fees that the buyer should pay in case they pay later than a set amount of time after issuance of the invoice. You can charge an interest on the total value of in the invoice if the buyer goes past this set period of time. Once you issue an invoice with this charge indicated in it, you can expect that your client will respond by either paying you promptly or by inquiring about the charge. Be ready for these responses when you issue an invoice that has this type of charge on it.
Communicate with your clients or buyers
This is an effective way to get the invoices paid fast. You can use many forms of communication. Examples are emails, phone calls, letters as well as letters in the mail. The most effective way to communicate in this way is to make phone calls to the clients. The voice of a real person is much more persuasive than emails.
Invoicing is very important in keeping a business afloat. It is the process that seeks out money from the clients that you have already paid. It is important to know how to use the various types of invoices and also how to push for their payment.