Electronic invoices are a great option for any business that bills its customers through the mail. In addition to saving paper and stamps, electronic invoicing software allows businesses to create invoice templates that can be used over and over. All the business has to do is modify a few items, such as the due date and dollar amount.
But what additional components of an electronic invoice make it complete? There are a handful of elements, aside from just the payment amount, that businesses should include on electronic invoices to their customers. Check out the image below and the accompanying key to learn more about the components of an electronic invoice:
A. Invoice #: Tagging each invoice with a number or other code helps both parties in the transaction with their files. It’s important to have a unique identifier for each invoice to differentiate between multiple customers, or multiple invoices to the same customer. It helps the customers stay organized so they can keep track of what they’ve paid and what is outstanding.
B. Invoice Date: The invoice date indicates the day in which the initial invoice was created. If, for instance, you’re invoicing policy is Net 30, your due date (detailed below), will reflect that.
C. Company Logo: Some invoicing software allows you to upload your company logo into the electronic invoice. This feature adds a professional touch to the invoice, and gives your customers added confidence when making payment.
D. Company Information: It’s always good to further comfort the customer by providing your company address, phone number, email address, and website, if applicable. Providing this information right on the invoice makes it easy for them to contact you with any questions, eliminating further slowdowns in the payment process.
E. Customer Information: Likewise, providing specific customer information adds a custom feel to the invoice, and is standard on electronic and paper invoices alike. If the invoice is sent to a business, it’s encouraged to include a specific contact’s name with the business name.
F. Items and Descriptions: The “meat” of the invoice. This details the product or service for which payment is required, and provides more detailed information, when applicable.
G. Quantity, Price & Amount: This part of the electronic invoice is basic math; Qty x Price = Amount. Add that up for each item, and you get…
H. Subtotal: Like most receipts you see in day-to-day transactions, invoices subtotal out all charges. In this particular invoice, you’ll see an extra line for a discount on the products described in section F. This is also a common area to include taxes, if applicable.
I. Total Due & Due Date: Probably the two most important components of an electronic invoice in the eyes of the customer. How much do I owe, and when is it due? These two pieces of information should be easy to find on the page (highlighting the section helps). The customer often starts here, and then backtracks to review the details of the charges.
J. Click-to-Pay Button: An electronic invoice’s click-to-pay functionality gives it a leg up on its paper counterpart. When a customer clicks to pay, they are taken to a payment form where they can choose their payment method, key in their information, review terms and conditions, and simply click “pay.”
K. Comments: Finally, if you wish to include comments specific to the invoice, such as late payment fees, some invoicing software will let you do so in the comments section.