All written communication to your members will affect your relationship with them, and invoices are no exception. It is important to structure your invoices effectively, making sure that the message is clear, the information is correct and payment of the invoice is made convenient. In this two-part post, we will be looking at 1) How to set up a system for generating invoices, so you don’t end up creating them all from scratch, and 2) What details are of absolute importance for your invoice. Check, check, double-check!
Eyes on the goal
Invoices send an important message to your coworkers. Invoices outline what amount they owe you, what services/products they owe you for, and how they can make their payment. Getting paid might be a different story, but it is certainly not a separate process. Therefore, it is important to design your invoice in such a way that it supports the goal of receiving due payments.
When getting started, individuals or small contractors might initially get a little overwhelmed and will need some time to get organized when it comes to setting up an effective invoice system. After all, invoicing does not only entail drawing up and sending off the bill; you’ll also have to follow up and make sure the check arrives in good order and in the right hands.
Large companies tend to have much bureaucracy, and your invoice may have to pass through several departments before it is processed. Some very small details can make the difference between an invoice that is paid directly upon arrival and one that stays on a desk for weeks or months — and might even end up written off in your books. Don’t leave this to chance. Be the master of your destiny and do what’s in your power to make immediate payment a habit of your coworkers. Offer automatic payment methods to shorten the time it takes to process invoices and ensure a fast resolution of billing queries, increasing your accuracy and making communication seamless.
But first thing’s first: If you want to receive timely payments, the first step is to make sure that your invoices are compliant with your local laws and regulations and that all the information your coworker needs is included. We have put together some tips that will make your invoices send a clear message and make payment easier for your coworkers — and payment collection easier for you!
It is a good idea to have an invoice template with all the information you need to display in ALL your invoices. For the moment, let’s leave the details and the appearance of the invoice aside and focus on what is legally required or part of your business strategy.
The word INVOICE and a unique invoice number
As well as the word invoice, you should always include a unique invoice number — and invoice numbers must be consecutive. This is not just a best practice; in most countries, it is the law. If you are a new business, check with a local consultant to find out if there is a standard invoice number format that applies in your country and if so use it on all your invoices.
All your up-to-date contact details
Add your complete contact details to your invoices: postal address, phone number, and email. Do you have a fax? Then add that, too. In some countries you are even required to add the name of the founder of the company in your invoices, or in what your registration number is with the chamber of commerce. The key is to make sure that invoices include all your details and that of your coworkers’. Doing this will reduce the time it takes to resolve any disputed invoices and save money you could otherwise spend paying tax fines.
The correct payer’s contact details
Pay attention to spelling, both for names and addresses, and make sure you include their taxpayer ID if this is mandatory in your country. This unique reference number is used for tax returns and differs in format and name in each country. In some countries, this ID must be included in invoices that fall into a certain category, in other countries it is never used (only when filling out tax returns) and in again others, it is mandatory in every invoice, subject to huge fines if you break tax law. Check with an expert to find out what is mandatory and then include this field in your invoice template to make sure you don’t ever forget it.
Ensuring that you collect all the information and documents you need from your coworkers at the earliest stage of your relationship, or whenever there is any change, will save you the time and hassle that comes with correcting and reissuing invoices. Keeping an up-to-date contacts database and storing whatever documentation you could need from your coworkers (passport copies, company registration papers, etc.) in one single place will help you in this endeavor. Use Cobot or another collaborative management software and ask your coworkers to fill out and maintain their own contact details. This way you will save time and ensure that your database is always up to date.