No matter what industry you’re in, one of the most important documents you’ll send (and receive) is an invoice. And whether your business is well underway or just getting started, chances are that some people in your organization are still not entirely sure about what is an invoice?
This crucial document outlines the buyer, the seller, the product or services exchanged, and how to pay the bill. We’ve already published an article with the list of 10 crucial invoice parts. Below we identify the various elements of an effective invoice, and the importance of each.
You may consider your company’s logo, or name in an enlarged font, at the top of the invoice template. This will make the document easily-recognizable by clients and customers. (Learn more about professionally looking invoice templates).
Clearly state the document as an “invoice” at the top of the page. Also towards the top of the page, state the date, including month, day, and year.
An invoice number or billing code should also be provided, and it should link to your internal tracking or billing software. If the invoice is for multiple invoice numbers, ensure that you include all of them.
A purchase order number may also be included here, if applicable.
Key Company Information
What is an invoice if the recipient doesn’t know who it’s from? It’s important that you include all distinguishing information about the payee at the top of the document. This information should include:
- Company name
- Payee name, if different than company name
- Company address (including the address where payments may be mailed if different from company address)
- Phone number
- Fax number
- Email address
- Tax Identification Number (TIN), if applicable
The format of such information isn’t important, as long as it is clear and concise.
Payer Information/”Billed To”
The “payer” is the individual or company responsible for paying the invoice. Similar to the key company information, the payer information section should include the following:
- Payer name
- Payer company name
- Payer address (this is generally where the invoice will be mailed if sending a hard copy)
- Phone number
- Fax number
- Email address
Accuracy of this information is key. Misspellings of client/customer data do not give a good impression!
If your business sells goods (products), use this section to detail this information. Provide relevant data such as product ID, product name and description, quantity sold, and per-unit price. If you decide for Billdu invoice maker, you can quickly add items to your invoice by scanning their barcode.
You may also include any taxes applied to the goods in this section. And if you granted any promotions or freebies, this section is helpful because you can itemize that product with a zero dollar amount.
For products that were delivered, whether by your company or a third party, you may also consider including a delivery date and tracking number in this section.
If your business provides services, use this section to detail this information. Provide relevant data such as the date the service was provided (and by whom,) the number of hours of service provided, and the hourly rate (unless it was billed as a lump sum.)
Keep in mind that often, internal auditors review invoices for unclear detail in this section, as it can often be a red flag for fraudulent invoicing. For this reason, it’s imperative that you provide as much information in this section as reasonably possible.
For example, short descriptions such as “consulting services” are not recommended. A better alternative would be “March 23, 2017 – John Smith consulting services (procurement report analytics) – 4 hours, $150 per hour – see rates in contract addendum FY15a.”
…Plus Anything “Extra”
What is an invoice add-on? Apart from the actual goods and/or services provided to the client, you may also have extra fees or add-ons, like taxes, service fees, included tips, etc.
Be sure to itemize these details. For example, don’t simply say, “add-ons.” Your customers likely won’t know what this means and, once again, an auditor may find issue with this vague information.
This might seem obvious, but despite all other details included on your invoice, this is the most important. Everything listed on your invoice should equal the balance due.
The only exception? If you’ve sent multiple invoices, and some have not yet been paid, you may find it useful to include total balance due, which would be the total of all outstanding invoices.
This can be helpful for a customer since they will not need to dig up old invoices and add them up – instead, they can simply pay the total balance due on the most recent invoice.
Payment terms generally include when payment is due, and penalties if this is not met. Terms may be 10 days after invoice date, 30 days, etc. (all the more reason to include a date at the top of your invoice!)
Consider penalties carefully, too. When considering what is an invoice penalty, think about what’s standard for your industry. This might mean a percentage of the total invoice is added to the bill (e.g. 5%) or a flat dollar amount.
Payment Methods Accepted
Use this section to discuss what forms of payment you accept. This includes physical checks, money orders, credit cards (specify which cards), PayPal, etc.
If the invoice is electronic (e.g. web-based or sent via email) you can include links in this section, as well. This is particularly useful for PayPal.
If you accept payment over the phone, you may also want to include the phone number in this section. Looks complicated? If you own an iPhone, all of this can be easily created using our iPhone invoice app.
Contact Information for Questions or Concerns
Though it may seem obvious since you’ve already included this information under Company Information, it can’t hurt to provide a phone number for customers to call with questions or concerns.
But remember: if you’re going to provide a number, there must be someone to actually answer the call, or return it. Nothing upsets a customer more than finding an error on an invoice, and not being able to speak to a real person about it.
There’s No Need to Ask, “What Is An Invoice?”
Pick up any invoice laying around at home or in your office – this might be your mortgage bill, a medical invoice, or an invoice you’ve received from one of your suppliers. You’ll be able to identify most (if not all) of the sections we’ve shared above.
Remember: above all, your invoice must be clear, concise, and error-free, whether you create it manually, use an online invoicing platform or invoice generator apps. For further assistance in developing your own invoicing management process, contact us today.
Invoice Management Systems
Entrepreneurship has many romantic aspects, including setting your own hours and rates. Invoice management is not one of them.
Although not a fun part of being in business, invoice management system is necessary. Keeping track of your invoices shows you the work you’ve performed and how much you’re owed. It also helps you keep tabs on who’s paid and who hasn’t.
Managing invoices is no easy task. It takes planning and coordination. But when done effectively, you’ll never be unsure of what you’ve done or how much you should have. And what can be better than using a simple iPhone invoice app or the Android invoice app?
We’ve listed 10 steps to effectively managing your invoices below.
10 Steps to Effective Invoice Management
Invoice management isn’t as easy as throwing all of your invoices into one pile. You must establish a system of organization and double-checks. If you don’t, some of your clients could be stiffing you without your knowledge. Read on to learn more about essential components of a functional invoice management system.
1. Payment Reminders
An automated payment system is an excellent investment for any entrepreneur.
Automated payment systems allow you to set reminders of payment for your clients. The reminders include how much they need to pay you as well as the payment due date.
You’ll be notified of a client’s failure to pay. That way, you can contact the client and address the situation.
There are several ways that an entrepreneur can be paid. Common ways include by hour and by project. If you require payment by project, many systems allow you to send a request to the client for project approval.
The most convenient aspect of automatic payment systems is not having to keep checking for payment. Normally, you don’t have to contact clients unless they haven’t paid you. With one of these systems, you’ll be sure the only reason you have to contact a client is for payment.
2. Invoice Numbering
All transactions should have a unique number attached to them. That number allows both you and the client to reference the transaction. All invoices should have the corresponding transaction number printed or written somewhere on them.
Furthermore, you should have a system for keeping track of all numbers. Many business owners use software or an online invoice maker tool. Even basic programs such as Microsoft Excel and Google Sheets can do the job.
Old-fashioned entrepreneurs might not be comfortable with relying on computers to keep records. In this case, a record book or filing drawer can satisfactorily substitute.
If you stick to written records, be sure your invoice numbers are arranged in some kind of order. An easy solution is to combine the date and number of the job.
For example, let’s say you do two jobs on December 20, 2017. The first job would be 2017122001 and the second job would be 2017122002.
3. A Simple Payment Process
A simple payment process can make all the difference in how effective an invoice management system is.
The most convenient payment system is one where both you and the client can view the client’s invoices. Ideally, this system would allow both of you to edit information, especially payment information.
If such a system is not available, the next best thing is an e-mail receipt. E-mail receipts are sent directly to a client’s e-mail address. E-mails can also be set to send you a notice once they have been viewed.
This kind of system also typically updates you as soon as you receive payment.
An honest day’s work merits an honest day’s wage.
Some clients don’t see it that way, though. And some struggle with their own expenses.
Regardless of the situation, you need to be paid for the work you’ve done. And you should be paid on time.
The best way to ensure you’re paid on time is to set up a penalty system. Include a statement on your invoices that you will charge a penalty fee if the invoice is not paid on time.
It wouldn’t hurt if that penalty also increased over time.
Stiffed invoices are a bane of entrepreneurs. For this reason, it’s also a good idea to make all clients sign a contract promising payment by a certain date. That way, you can take that client to court if you don’t get paid.
5. Automated Invoices
Running a business is tough work. It’s hard to keep up with invoicing, especially if you’re a one-person business.
Thankfully, automated invoicing exists.
In your invoicing system, simply select the timeframe for which you want to bill and hit “print” or “send.” Depending on which you choose, all of your invoices for that timeframe will print for mailing or be sent to clients via e-mail. Recurring invoices are a great feature, too. You can have invoices created an sent automatically – try Billdu invoice maker!
6. Timely Billing
Regardless of whether or not your invoices are automated, they need to be sent out on time.
Sending your invoices out on time helps you keep track of who has received their invoice and who hasn’t. In turn, timely billing helps you determine who still needs to pay.
Timely billing goes beyond efficient invoice management system. It makes you look professional and reliable. It is important to always maintain that impression for clients.
7. Template Customization
Invoices with mismatched templates are hard to read. The information is jumbled together, and often the due date doesn’t stand out.
You can remedy this with an invoice management system that allows template customization. Template customization allows you to move elements on your invoices. It also lets you remove elements altogether.
That way, only relevant information will be displayed, and it will be easily readable.
If template customization isn’t available, there is another option. You can use a colored highlighter to mark the important areas of your invoices.
8. Time Tracking
Keeping track of your time is important. If you bill by the hour, your time determines your wage. If you bill by the project, you can see how much time you’re investing in a particular project.
Time tracking is also important for clients. It lets them see how much effort you’re putting into your work for them.
9. Short Due Dates
Part of ensuring you get paid on time is short due dates.
Don’t give a client more than a couple of months to pay up. In a couple of months, that client could have moved on to a different area. That leaves you with an unpaid invoice for hundreds, maybe thousands of dollars.
If possible, set the due date for a few weeks rather than a few months.
Short due dates also let you determine which clients are reliable for timely payment. Unreliable clients can be weeded out and refused future work.
10. Professional Language
It goes without saying that you should always use professional language when dealing with a client.
It can be difficult to maintain a professional face with a client who hasn’t paid up, though.
When dealing with these clients, always use “please” and “thank you.” In other words, “Please pay this bill by this date” and “Thank you for your business!”
Including such language on your invoices shows your professionalism and appreciation for your clients’ business.
Also, to be a pro, you need a software that streamlines the process of invoice creation. With Billdu, you can create invoices online. Adding items to your invoices can’t be easier, too, as you can just scan their barcodes without the need to enter any information.
Find Out More About Invoice Management!
Billdu is a full invoice management system designed for your convenience and your clients’ convenience in mind. Our system includes payment reminders, recurring invoices, and other must-have features to keep you on top of your invoices.
To find out more about invoice management, please visit our blog reel!
If you’re starting with invoicing, you want to make sure you’ve got everything right. You’ve come to the right place – in this post, we’ll explain the essential invoice elements. Read on to learn which 10 invoice components must not be forgotten on your invoice.
What to Include on an Invoice
What is on an invoice? And why does all this matter? Let’s look closely at all the important invoice elements.
Since an invoice is your bill for services or products sold, you need to keep one around for company records. And after creating an invoice, you send it over to receive payment and keep track of transactions from customers.
The invoice is an extremely important part of any business transaction and has many uses to keep the company going strong. So whether you tend to create invoice online or in an app (check out our iPhone invoice app, iPad invoice app and Android invoice app), this tutorial will help you consider the importance of selected parts of an invoice.
An invoice maker does a lot of the hard work for you and allows you to create templates with plenty of easily customizable fields to work with. An invoice maker not only makes things simpler, but it also speeds up the process, optimizing company time. And thanks to it, you can rest assured all important parts of an invoice will be correctly filled in.
If your product or service isn’t paid in full when it’s received, you’ll need a professional invoice as a formal way of requesting payments. (And the invoices will serve as a paper trail afterward for the transaction.)
You’ve got to make sure, then, that each invoice is thorough and laid out in a way that is comprehensive and easy to understand. Ensure your formal invoice checks all the following boxes when creating it using one of the free invoice templates or building it in your invoice maker.
Parts of an Invoice
In this part we’ll show you what should not be forgotten on every valid invoice.
1. A Standout Header
Not everyone thinks the same way as everyone else, so don’t think that adding a distinct header to company documents is common sense. Label the invoice in clear text somewhere at the top, naming exactly what the document is.
This will save you a big headache and the confusion over what all these random papers flying around your office are. Include a logo in your header and make it look as professional and presentable as possible.
2. Invoice Number or a Unique Identifier
Every invoice should come with its own invoice number (or some other unique identifier) to separate it from the rest in the stack. It could be a filing code, a unique chronological number, or some kind of data-based purchase order number.
If you’re sending the invoice requesting payment, then you should make sure the organization doesn’t require any unique company details. This could be purchase order numbers or maybe specific billing codes.
A unique identifier makes all the difference in the world, especially when it comes to receiving timely compensation.
3. Your Company’s Information
Near the top of the invoice, you should include the legal name, address, phone number and fax number (if applicable). This helps to differentiate who is paying and who is receiving payment (on top of keeping things really simple and clear).
If there are any issues along the way, any customers with an invoice can call a company number or send over information if needed. Make sure all your information is printed accurately and is in a place that is easily seen.
One of the most important pieces of information you can include is the actual date of the transaction. This will help to simplify the process of cataloging when products were sold or services were rendered.
It also helps out if there is ever confusion over when something was sold. Say there was an issue with the shipping of a product: without the actual date of the transaction, how will anyone figure out where the post office went wrong?
5. Goods or Services Sold
This seems to many like the “meat” of the invoice. It doesn’t have to be presented in any particular way but should be fairly easy to read and understand. You’ll probably want to include things like:
- The item name or title of service that was provided
- The price of the item or service
- The amount or quantity of product or service sold
There are bound to be other details about the product you might want to include. Keep them here in your “sold” section to keep things from getting confusing.
6. Fees or Taxes as an Invoice Component
Going along with the products and services sold, you’ll probably want to include the price of any taxes or fees associated with the item. You might need to apply the rates or taxes in a different budget or record on the filing end.
The biggest takeaway here is to include any extra taxes or fees very near the price of the product or service. That way you can tack it all together in the “total amount due” field.
7. Total Amount Due
This one’s probably the most obvious on the list. Yes, you need to include the total amount due in the transaction on your invoice. Not only will this settle the amount, it also serves as a good reference point for you and the customer.
8. The Terms of the Transaction
Inevitably, the transaction will include some important verbiage in the transaction terms. They do not form a compulsory part of a formal invoice, however, to make the terms more apparent, it’s a good idea to include them on the invoice so that customers can easily reflect back on them.
The terms may include penalties for paying late or not paying in full. There could be additional percentages of the bill due at certain later times. Whatever your company’s terms, try to include as much of them as you can on each invoice.
9. A Unique Message on the Invoice
Set yourself apart with a designated spot for personalized messages. This can be used to say “thank you” to a client or make reference to something unique to the project.
Think about when you send a gift or flowers from an online order; there’s usually a place to include a special message to your loved one. Make all your customers feel like loved ones with personalized messages right on the invoice!
10. Due Date on the Invoice
The due date should absolutely appear on the invoice and might be the most important item on this list (along with the product description and total amount). The due date will help keep the process and invoice history organized.
Essential Invoice Components in Your Invoice Maker
When laying out an invoice in your invoice maker, make sure to include these essential ten items for an effective document. There’s a lot of responsibility balancing on the invoice pages, so they should be as thorough as possible.
Looking for other beneficial tips for small businesses or professional invoicing? Check out the Billdu blog for all things helpful for small businesses!
Did we miss anything in our list of invoice items? Let us know about it in the comments below!
Downloadable Invoice Templates with all the Essential Invoice Elements
We have prepared a set of free downloadable invoice templates. All the right parts of an invoice in the format you require.
You speak, we listen. Our development team was working very hard to deliver new features to both mobile app and website. These are the most significant changes:
From now on you can create, email and print a statement for any of your customers for a selected time period. Client statements provide an overview of any outstanding invoices along with any payments and credit notes, it’s a detailed summary of the work you have completed. Statements are usually sent on a monthly basis to remind clients of any outstanding account balance and also as a payment reminder. Statements are available for both iPhone and iPad and you will find them in the Client section by selecting a client right next to the its name.
For those who have not heard about this service, Stripe is a third-party payments processor built around a simple idea: make online payments for companies easy.
You can now connect your Billdu account with Stripe and let your clients pay invoices directly & online using common debit and credit cards. This is possible regardless the platform, both using our online invoice maker and invoicing apps. With our latest update you can easily link to Stripe’s payment processor and use all of its features and payment possibilities. If activated, a Pay now button appears directly on an invoice, even in the PDF file itself. After a successful payment the money is transferred to chosen a bank account.
Turn on your instant payments in Payment options at your Companie’s settings or directly on an invoice while editing, create a Stripe account and receive payments faster.
This feature has been demanded for a long time by many users. Now you know on the first sight whether an invoice has been already emailed to a client by a simple status Sent. Also when the client opens the invoice, the status changes to Viewed and you can be sure your invoice was received and opened. This information was available on the invoice’s timeline on our website before but it is even more comfortable to see it directly in the mobile app.
Contact name displayed
Are you the owner and contact person for your company? Would you like to have your name or number displayed on the invoice in case an issue arises? Enter your name to Company details in the Settings section and your name will be displayed on every invoice from now on. Simple and efficient.
Partial payment – mobile app
Our website featured a partial payment all time long but with the increase of mobile app usage we had to add this feature to our app for iPad and iPhone. The good old switcher next to UNPAID is gone and an arrow > has replaced it. By clicking on it a new window appears where you can edit the final sum, change the date of the payment and include some note to yourself. In case of a partial payment this appears not only on the invoice but as well as in the invoice list – such an invoice has the status PARTIALLY PAID.
Document names and labels
There are many reasons why you would like to change the name of a document or a label. Maybe you use Quotes instead of Estimates, Packing slips instead of Delivery notes or your local tax laws require to name your Invoice as Tax invoice. From now on you can change the document name and numbering to any text you need – and in any language.
You can also change the denomination of Payment method, Due date, Code, Description, Qty., Unit price and Signature.
As a matter of fact your can show or hide some invoice elements as well – Tax, Item discount, Due date, Quantity and Unit.
With all these modifications you can customize your invoices, estimates and orders even better than before.
An old Ferengi proverb says “A contract is a contract is a contract“. For your quotes to become a contract, and also for other documents, we have added a special feature. Your clients can now sign a document right in the mobile app. Select a document, click on menu (three dots) and select Sign by client. A new window appears where you can select a date, enter client’s name and let her or him sign it by finger.
You will find this feature in our latest iOS mobile app and it’s available for all devices both iPhone and iPad.
Our newly designed statistics show a comprehensive overview of your business’ performance. A simple pie chart was replaced by multiple color bars, we’ve added expenses overview as well as an overall balance view. Click on Invoices to see statistics of your Paid, Unpaid and Overdue invoices. Zoom the graph with your fingers to get a closer view and tap on a graph to get more details about the displayed sum.
If you use our statistics often, don’t miss this next feature:
Fiscal and tax year
Taxes can be a nightmare for many companies therefore a simple yet exhausting overview is crucial for a business. Now you can set up the beginning of a fiscal year that suits your country- and local laws. The Statistics will match accordingly to that setting and display all your invoices, credit notes, payments and expenses for the selected fiscal year, along with tax calculation. You will find this setting on both mobile app and website under Settings – Document settings.
Would you like to try our Billdu invoice maker? Now you can try it for free with a 14-day no credit card trial. Or, to see how easy it is to generate invoices with Billdu, try our free online invoice generator first.