If you forget to add some crucial ingredients, the dish becomes tasteless similarly, a number of businesses forget to pay attention to few essential ingredients while invoicing which makes the bills insipid. Let’s see, what are those essential factors required for preparing a perfect invoice.
Invoice – a crucial document without which no business can survive. Invoicing is the backbone of any business but it is sadly backbreaking too. The significance of invoicing is quite simple to understand, ‘If you want to get paid, get your invoices right’. Thus, even if it is a laborious process, it is inescapable.
Mistake in invoice will result delay in payment or even no payment. Invoice is a magical document for getting the reward for your sweat. It is the professional way to ask money from your client. As soon as you complete your project, invoicing should be on high-priority. Small companies and freelancers would probably think that they did not commence with business just to do billing, however they should also understand that they did not start business to undergo failure because business without invoice is undoubtedly a bankruptcy.
Thus, any business under the sun has to foremost get their invoicing fundamentals clear, so that they do not goof up with the payment process and ensure with smooth cashflow.
Here are some essential ingredients for preparing a perfect invoice:
For whom are you creating the invoice? Obviously, for your clients. Receiving money is always gladdening but giving money is heart-rending. Hence, you have to try to make your bills as much as customer-friendly, so that they do not feel the burden of spending money. Of course, if your work is good, clients would value your effort and pay you contentedly. However, to double your chances to get paid on time make your invoices as better as your work.
- Bills should be simple, clear and easy to understand
- Customers have the right to know about where are they spending money
- An invoice should contain all the essential details related to the services and products provided to them
Don’t forget your etiquettes:
Whether it’s your personal life or professional, you need to follow manners to maintain relationships. Bill is the last but most crucial medium of communication which determines the worth of your hard work.
- It acts as your mediator to solicit for payment from your client thus the language used in the invoice should be courteous and not demanding.
- ‘Please’ and ‘Thank you’ are the two polite words that can change the approach of your invoicing
- Of course, quoting price for your hard slog is your right and not an offense but still you need add some words of courtesy to increase your chances to get paid on time
Consider value-based pricing:
For small businesses, billing is a devil which they cannot get rid of.
- Value-based pricing is surely one of the effective ways to invoice your clients
- Some customers might feel that you are cheating on them by charging them on hourly-basis thus consider value-based pricing
- This will allow the customers to understand the real value of each products and service, irrespective to number of hours spent
- Most of the clients find value-based pricing more favorable than hourly basis
Consider your payment terms:
Every business has to bear an assortment of expenses while undertaking any project.
- When you invoice your clients you have to first consider the cash outflow, so that you are able to incur that amount from the clients
- You have to ensure that you get the necessary amount when the customers pay you the bill. Thus be clear with your payment terms
- If you are charging on monthly basis, your payment term should either be 30 days or 15 days
Consider your incentives:
If getting paid is loved by businesses then discounts are loved by clients. Anyway you are going to be happy when you are paid then why not make your customers happy by offering some discount?
- Though discount is not a favorable option for businesses, sometimes you can undertake this business strategy to get paid fast
- You have to prioritize and decide, what will work in your favor, late but full payment or slightly-less but timely or prior payment?
At the end of the day, your invoice will be dependent on number of things and may differ according to the customers, project or services/products provided. Ultimately what is crucial is that you get paid. By focusing on the above ingredients, you can streamline your invoicing task and concentrate on what is actually significant, that is your business.