Today, we’re tackling one of the most essential components of running a small business: the invoice.
You know that you need to invoice your customers and clients in order to get paid and maintain a healthy cash flow, but what exactly should your small business invoices look like? Are there things that you absolutely must include, and if so, what are they?
The Basic Building Blocks of a Small Business Invoice:
Designing an effective small business invoice is something nobody really takes the time to explain in detail—perhaps because it seems like such a little detail. But it’s important nonetheless, because it helps you convey a professional image.
1. Your business name and contact information
Clearly list your business name, email, phone number, website and physical address, just as you’d list it on any other formal correspondence.
2. Your Client or Customer’s Name and Contact Information
Clearly list the customer’s name (or the contact person’s name and title, if you’re working with a larger organization). Include as much contact information as possible, including email and physical addresses.
3. The Invoice Number
Each invoice you create should have a unique number associated with it. You can start invoice numbers at any number you want (which is useful if you don’t want to send your very first client an invoice that says ‘Invoice #0001’!). You can assign invoice numbers chronologically (for example: Invoice #0023) or use a unique format for each client (for example: Invoice #CLIENTA0023 or #CLIENTB0023).
4. The PO Number, If There Is One
Some of your customers, especially if they’re bigger businesses, will require you to list a PO number on the invoice. When they agree to buy a certain product or service from you, their accounting team creates a PO (purchase order) and corresponding PO number. All you need to do is include that number on your invoice so they can match it to the original purchase order and process your payment without delay.
5. The Invoice Sent Date and Due Date
List the day the invoice is sent as well as the payment due date. You could specify that the invoice is due upon receipt, upon completion of a project or delivery of a product, on a specific date in the future, and so on.
6. A breakdown of products or services provided
Include an itemized description of each product, project, task or service you’re invoicing for. For example, if you sell a product, your invoice should list each item purchased, the quantity purchased, the price per item, and the total price. If you’re providing a service, your invoice should list the flat fee you charge for that service, or the hourly fee you charge and the total hours worked. Also clearly note the date when that service was provided (or will be provided in the future).
7. The total balance due
Once you’ve itemized all the products and services you’re billing for, add the appropriate tax (if applicable), and list the total balance due.
8. Payment terms
Specify payment terms for this invoice. For example, if there is a deposit, when is it due? If a client pays an invoice past the due date, is there a late fee?
9. Any notes for the client or customer
It can be nice to leave a brief message for your customer, even if it’s just a simple thank you for doing business with you.
Finally, pay attention to the design of your small business invoice. It’s an extension of your brand, after all! At the very least, it should include your logo. If possible, you can also use your business’s signature fonts and color scheme.
This is where PaySimple can help simplify the invoicing process. We have everything you need to create professional email invoices, including branded templates and the option to set up recurring invoices. We also keep track of your sent, paid, and unpaid invoices with a real-time dashboard—so you spend less time staying on top of your cash flow and more time running your business!
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