When to send an invoice

Invoices are generally sent once a company has completed an order for a client.

This is usually the standard for both products and services. In the case of a product, the invoice would be issued after delivery. For services, it would happen once the service has been provided.

However, despite this being the norm, there are still exceptions.

In some industries, it can be standard for businesses to issue the invoice after the order has been placed. However, in other cases, a seller might ask for an initial deposit.

In this article, we’ll give you a brief overview of what is an invoice. Followed by some tips on when to send an invoice, how to send it and the mistakes that are stopping you from being paid.

What is an invoice

An invoice is essentially a bill made by a seller. It lists the products or services that the seller is providing and their associated costs. We break this down further here.

An invoice can be seen as the first step in processing a payment.

When should I send an invoice?

The best time to send an invoice depends on a few factors.

If it is a large project, you might want to issue the invoice straight away and request a deposit before the project begins.

For a small job, it can be easier to just invoice once you have completed the work.

Your industry can also impact when the invoice is sent. In some industries, it is standard to send the invoice before you begin working. However, in others it is the reverse.

The number one thing to think about is when you want to be paid.

If you want at least part of the payment before you begin the work, you will need to send an invoice straight away.

If you normally take the payment after the work, you can send the invoice at the end of the project.

You might also not know what the total cost will be until you finish the job. In this case, send the invoice after you finish the work.

How to send an invoice

There are many ways to send an invoice. Here are a few of the common ones:

1. Mailing invoices

Benefits: This method can be helpful if the client isn’t overly digitally literate or they live in a remote location with no or an unstable internet connection.

Negatives: This method can be slow and unreliable. There’s no guarantee the invoice will reach its destination and at the speed you want it to.

2. Emailing invoices

Benefits: Email is a reliable and easily trackable method. You can also search for sent invoices later if required.

Negatives: Inboxes are full of a lot of marketing and junk nowadays. It isn’t hard for your invoice to get lost amongst it.

3. Sending invoices using invoicing software

Benefits: You can send your invoice usually at the push of a button. You’re also able to track the invoice and issue overdue reminders and payments. All your invoices to the client will also be stored in one place.

Negatives: Again, the emails go to the client’s inbox so it may get lost amongst their other emails.

Common invoice mistakes (that might stop you getting paid)

A mistake on your invoice might affect you getting paid. Here are some common invoice mistakes so you don’t get caught out:

1. Incorrect dates 

The date at the top of the invoice should be the date you generated/issued the invoice and the date the payment is due. Any dates you have in the description section should be related to your project (i.e. delivery date or performance date). You might also include dates in the payment instructions if you are requesting a deposit in advance or payments in instalments.

2. Incomplete vendor details

When you invoice a client, they’ll need your contact information, including your name, business name, address, phone number and email address. Most importantly, you need the correct details about how you will receive the payment. For example, if you’re getting paid via bank transfer, put your bank details on the invoice.

3. No purchase order number

A purchase order number speeds up the payment process. It shows a company, their accountant or their accounting department that this payment has been approved. Without this number, the approval of this payment may be blocked.

4. Incorrect totals

It sounds obvious but without the correct amounts, you won’t receive the correct payment. Make sure your items actually add up to the totals you have listed. A client will not pay an incorrect invoice.

5. Vagueness

A seller should be exact about what they have provided, when they provided it and the costs of providing it.  This clarifies any confusion and helps the client understand what they are paying for. This can also be helpful in the future if either party have to audit their accounting.6. 

6. No email subject or a bad subject line

If a seller sends an invoice via email, they need to correctly label the email. Without stating that the email is an invoice, the client might neglect the email or it could get lost amongst other unrelated content. You should also send an invoice as a separate email and not part of another email or an email thread.

How to get your invoices paid clear payment terms on invoices

The most important way to get your invoices paid by customers is to include clear payment terms on invoices.  Payment terms are displayed at the bottom of the invoice and are determined by the seller of the service/product.

Invoice payment terms might explain how the payment is to be broken up – split or in one payment. They might give a timeframe as to when the payment is due after the services/products have been provided. There could also be a section that outlines any interest to be added to the invoice if it is not paid on time. 

Although payment terms are decided by the seller, you will want to notify the buyer of your payment terms before you provide them with your services/products.

This will prevent late payments and establish a better relationship with the client.

You should also be open to negotiating the payment terms if it is an important client that you would like to have an ongoing relationship with.

Forgetting to add payment terms is one of the biggest mistakes you can make on an invoice. If the buyer doesn’t know how to pay you, how are they supposed to pay you?

How to follow up on late payments

Many companies don’t follow up on late payments. They assume that the client will pay the invoice unprompted.

In some cases, they will but more often, they won’t. It’s not necessarily because they want to get out of paying you. Sometimes they just forget. 

Nonetheless, you need your money. Try following up using one of the methods below:

1. Send customers a follow-up email

If you’ve been talking to your customer over email, it can be a good idea to send a polite email and attach the invoice. You could ask the client for an update on the payment or just give them a gentle reminder that it is past the due date. The customer may provide you with future work so you should keep it as respectful as possible.

2. Give customers a call

Phone calls can be an effective follow up method as they are more personal than an email. When you make a phone call to the client, make sure to have the invoice on hand and an email with the invoice ready to go so you can send it to them straight after the phone call.

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