Consulting is a service provided by a third party with special expertise in a certain sector. Their work involves advisory jobs or implementing services which are done with an exchange of a fee. This professional service involves billions of transactions and consultants earn a huge profit. But like other business ventures, consulting services do require a proper accounting method.
Consultant needs to track their productive working hours and prepare their invoice once they are done with their job. Invoicing as a consultant may seem tedious and confusing. But it is not! Just like any other commercial invoicing, consulting service involves a similar kind of invoice format. Still, if you feel it troublesome, check out this article to clear all your doubts. Keep reading to know more!
Steps to create an invoice for consultants
Whether small business owner or a consultant, invoices should be prepared professionally with all the necessary information. An invoice is a vital accounting and legal document that authenticates the services provided by the consultant. Here are a few pointers that will guide you, how to create an invoice as a consultant.
Add invoice number
An invoice without a unique number is easy to get overlooked when it’s time for payments. Do remember to assign unique numbers to your invoice. These numbers are identifiers, that make it easy for you as well as your client to refer to this in the future. Add numbers sequentially for better understanding. There are various ways of assigning numbers and one such is using the date as the invoice number. Mention the invoice number in bold at the top so that it is easily readable.
Include invoice date
The date is a must-have part of an invoice. Mark the date when the invoice is prepared and mention it just after the contact details of the clients. Invoice date helps in bookkeeping purposes and helps both the parties to refer to the particular transaction in case of any queries.
Track your hours
Most commonly, consulting industries charge their clients on an hourly basis. For such a system you must implement software or efficient time trackers to monitor your billable business hours. Tracking the hours and then multiplying it with your hourly rates will help you to get the total billable amount that is to be mentioned in the invoice.
Include professional headers
A professional invoice header is a must. Mention the word “invoice” in bold and easy-to-read font to make the purpose very clear. You can add your business logo as well, to make your agency or business enterprise more prominent to your client. The header also includes your business name and other contact information.
Mention contact details of your clients
Allot a space for mentioning the contact information in the invoice. Your client’s, as well as your contact details, should be mentioned in the invoice. The invoice is not just an accounting document, it also helps both the parties to contact either side in case of any emergency or queries.
List your services
Like in any commercial invoice the product description is mentioned, the same way the list of services provided should also be stated while invoicing as a consultant. Organize all the information in columns and include the hourly rates, the number of hours worked as well as the subtotal.
Mention the payment policies
Payment policies are also a vital piece of information. Do remember to mention the payment method along with the late fee policy (if any). You must discuss the payment methods before signing the contracts. Keep your payment methods flexible to avoid delays in payments due to a mismatch in payment procedures.
Payment due date
The payment due date is an important part of an invoice that helps to speed up your payments. State the payment due date in bolds to make it very clear to your clients.
State the total amount due
The total due amount inclusive of tax and late fee (if applicable) should be mentioned at the end in a prominent and readable font. This helps the client to understand what they owe to you at a glance.
Invoicing tips for consulting services
Getting paid faster is all that matters after the completion of any work. Below we have listed some actionable tips that will avoid delays in your payment process.
Monitor the working hour
Tracking working hours is vital for speeding up the payment procedures. Consultants need to keep a track of the productive hours so that they can invoice properly. As we have already discussed, most consulting services bill their clients on hourly rates. Therefore, it is essential to keep a track of the productive hours.
Do not delay in creating invoices
There is no harm in sending out the invoices to your clients as soon as you’re done with your projects. Sending the invoices immediately speeds up the payment process as it reduces the chance of getting overlooked by the clients.
Make payment methods flexible
Flexible payment methods like accepting checks, cards, bank transfers, online payments, etc., make it more convenient for clients to pay. Keeping diverse payment methods eases up the client’s job and eventually, the payments get settled quickly.
Request for deposits
In some cases, where you can understand that it would take months to complete, it is safe to ask for a certain deposit amount. This would help you to carry out your business expenses with a steady cash flow. It also avoids the risk of an economic downturn due to sudden project cancelation.
Be polite and friendly while you follow up for delayed payments
Follow up for delayed payments. Be polite while you send out friendly emails or make phone calls. As per various studies, a thank-you note at the end of a follow-up email maintains cordial business relationships and gets your invoices paid faster.
Billbooks invoice template would help you to build a professional invoice from scratch. We herein Billbooks offer you customized templates that make your process easier and faster. So with the above guide, you are all set to create an invoice as a consultant. What are you waiting for? Get Billbooks now!