Running a business may quickly grow into a rewarding asset, which requires acquiring some fundamental business skills such as how to invoice clients and manage payments. Congratulations if you are making money from whatever business you have! This is a tremendous accomplishment, as well as proof that you're well on your approach to starting your own little or large-scale business.
The ability to write (and keep track of) invoices is an important business skill to have. It is not difficult to create an invoice. There are cloud-based modern invoicing systems like Blinksale that you can use to create and track invoices at a glance. Every Blinksale invoice and estimate has its own history, including reminders, comments, and payments. And your dashboard provides a comprehensive overview of all your documents. How cool is that?
Invoice management might be a little more difficult, but it is important. You don't want to be in a position where you invoice a client just to find out three weeks later that they never paid you. You must keep track of your bills, and I'll offer you some pointers on how to do so later in this blog.
WHAT IS THE PURPOSE OF AN INVOICE?
I know some businesses who are OK with an email agreement. This arrangement is not illegal, but it is not a good way to do business. Invoices, like contracts, assist in communicating information and expectations between you and your client. They should be clear and precise, and they should assist you in keeping a paper trail for your task.
Before you sign your contract, find out how your customer plans to pay you. You work under a contract, don't you? You are, of course.
In any case, it's critical to specify your payment terms ahead of time to avoid unpleasant surprises for you or your customer. Your contract should specify how much you'll be paid and what tasks you'll be doing. Your invoice should be an exact replica of the contract.
WHAT ARE THESE INVOICE COMPONENTS?
- Your Contact Details
- Contact details for your client
- Invoice ID/Number
- The date of the invoice
- Payment Terms
- Due Date/Final Date
- Invoice Description
- Price per unit
- Due Amount/Balance
- Tax Scheme
- Cheques should be payable to
- PDF Invoice
YOUR CONTACT DETAILS
On your invoice, you must include your full name, business name, and address. This is certainly relevant if your client intends to pay you by check. It's also a good idea to include a phone number and an email address so that they may readily contact you if necessary. You may also add your company logo on the invoice to show how serious and legitimate you are about doing business with your client.
CONTACT DETAILS FOR YOUR CLIENT
You must provide the name of the person or organization for whom you are working. If you work for a large corporation, you might be required to address the invoice to a specific individual in accounting or a certain department. Gather this information before creating your invoice. If you have your client's address, you should mention that as well.
INVOICE ID NUMBER
The invoice number will be used to trace your payment. Whenever your client pays you, they should ideally include your invoice number so you know which payment corresponds to which invoice. This number will also be required if you need to follow up on an outstanding invoice.
It is entirely up to you how you number your invoices. Most individuals appear to use a simple number system such as 01, 001, 02, and 002, but you may choose whatever works best for you.
THE DATE OF THE INVOICE
You should include a date on your invoice so that both you and your client are aware of when it was issued. Undoubtedly,
If your client agreed to pay you as soon as you charged them, make the terms "payment due upon receipt." You would put "Net 30" or "payment due within 30 days" if your client indicated they would pay you within 30 days.
DUE DATE/FINAL DATE
If you've included the terms on your invoice, this is optional, but it's useful to add the payment due date. It is entirely dependent on the agreement.
This is where you state why you want to get paid. For instance, your description may be "a car detailing service".
PRICE PER UNIT
The unit price is often your hourly rate. For example, your unit pricing maybe $20 per hour. If you worked for two hours, your balance owing would be two times your unit price of $20, for a total of forty dollars. In addition, if you sell apples, your price per apple is $2. If you sell three apples, you will receive a total of six dollars.
This is the entire amount owed to you by your client. If you are dealing with US clients, you should mention whether you wish to be paid in British Pounds (GBP) or US Dollars (USD).
You may be obligated to collect taxes for the purposes of compliance, reporting, and auditing. Check with your local state and tax authorities to ensure that the mandated tax rate is followed. In most situations, you will charge your customer the tax rate of the state in which they reside, which may differ from the state in which you work. You can also consult with an accountant.
Cheque should be payable to
If you accept cheque payments, make sure your client knows who to write the check to. I know several business owners who have been unable to cash cheques because their clients wrote incorrect details.
PDF YOUR INVOICE
Always deliver a PDF version of your invoice to your client. A word document may be modified and changed by anybody, however, a PDF is only seen by your customer and looks more professional. This is not an issue with Blinksale because the system automatically creates a PDF file that is attached to your email.
HOW TO MANAGE YOUR BLINKSALE NEXT INVOICES
1. To create new Invoices, you can either select the Invoices tab in the center of the dashboard, which will route you directly to the invoice creation page, or select the Clients tab at the top, which will give you the main view where existing invoices are visible.
2. After selecting Invoices, you'll then press "Create New," which will take you to the Invoices Information field.
3. Select one of your clients using the drop-down and make sure to check the Date and the set Payment Due. So the preset for Payment Due is NET 15, NET 30, NET 45, and NET 60, which are just X number of days (duration) from the day that you send the invoice, or you can set it Immediately. You can also choose "Other" to create your own customized Payment Due schedule.
You can change the invoice number, but it's automatically prefilled based on the number of invoices you have in the Blinksale dashboard.
4. To create or add a new client for Invoicing, from the Invoices Creation Page click the "+ New Client" button located beside the Client Name field.
5. You can change the currency in which the amount is requested. Taxes, shipping, purchase order number, and late fees are optional and can be added as needed. If you want to further customize the Tax you can simply click the "Add or edit a tax" button and add a new Tax Scheme.
6. You can change the item type depending on what type of job, work, or service you are doing. Or is it an hourly rate? Is it a service? Is it a product? And then add a description as to what it is that you're working on, and then the quantity and the unit price, which will automatically calculate the amount.
7. If needed, you can add more items by clicking the "+ Add Item" button just left of the "Reorder Rows" button.
8. You can reorder the rows by clicking "Reorder Rows" and dragging the item by doing a long press on the 3 dots that will be visible on the left side of "Item Type."
9. You can also add a note to the client if needed. Once you're ready to send it, you'll press "Preview and Send".
10. In preview mode, you can edit, view, and add recipients as needed. The best part is that you can CC and BCC people. You can also modify the subject and message sent to the customer on the invoice. Whether you add attachments like a PDF or not, you can turn the feature on and off. Scroll down and you'll see the payment method you want to enable, whether you want a credit card or an ACH bank transfer with Stripe. And if you just want an ACH payment, you can change it using the toggle in the payment method.
11. You can also preview how it will look in PDF format for your clients by simply clicking "View" or the Preview section of the attachment. And when you're ready, you'll tap "Send Invoice" and the invoice will be sent to your customer for payment.
You can also check the complete step-by-step guide here: How to manage your Blinksale Invoices.
WHAT IS THE BEST THING TO DO IF YOUR CLIENT FAILS TO MEET A DEADLINE?
First and foremost, do not assume that the person does not wish to pay you. Things happen! Invoices get misplaced, and emails are ignored. You don't want to send a snarky (or intimidating) email to anyone who owes you money. Yes, you may be living paycheck to paycheck, and the fact that they haven't paid you may be grating on your nerves. But believe me when I say that late payment is not worth losing your connection with that client.
If no payments have been delivered and the deadline has expired, you must take immediate action. First, double-check the invoice you provided to ensure there were no errors. Is the deadline correct? Did you deliver it to the correct person? Once you're certain that everything is in perfect working order, notify your client.
Send a kind and professional reminder, and provide the invoice number so they know where to go. Below is the best example of how we can send a notification to your client:
I am hoping this letter finds you well. I'd like to follow up on an invoice I emailed on June 30th. I haven't received payment yet, so I wanted to make sure the email wasn't lost somewhere in the digital world. Could you kindly verify to see if the account management department has received it? I'll be happy to send it back if necessary. Otherwise, I expect payment within a week.
Thank you so much for your assistance! "
That message is pleasant, yet it makes it very clear that you expect payment. The only thing I would do is to include the invoice number someplace.
If you don't hear back from your customer after sending an email, make a follow-up phone call. Remember, keep your tone polite and never intimidate your client. I understand that there was a plethora of information, but I hope you found this blog informative. Best wishes for your business and your invoicing journey.