How to Invoice Properly

An unpaid invoice is a nightmare we would all prefer to avoid, but you're not necessarily just at the whim of your customers when it comes to whether or not you get paid on time.

It's also important to make sure you are invoicing properly - from the moment you take on a new customer, to how you deal with late payments - so you don't lose a single penny through your own fault and poor admin procedures.

Before You Invoice

When you take on a new customer, always get a credit report to decide how much credit to offer them, and make sure you issue an invoice before this limit is reached.

Also consider having written payment terms in place, which all new clients have to agree to before you start doing any work for them.

By issuing payment terms of your own, you reduce the risk of having a big-brand client come back to you, claiming that you have 'agreed' to their 180-day terms.

Written and agreed payment terms also remove any wriggle room for late-paying customers when you try to add penalties and interest to the amount they owe you later.

When You Invoice

Make sure all invoices you issue contain the correct details, including:

  • A unique invoice number.
  • Date of issue.
  • Due date for payment.
  • Correct client name (and other appropriate details such as address).
  • A breakdown of goods and services supplied - itemise this if necessary.
  • Subtotals and overall total payable.
  • Your name, company name and address as appropriate.
  • Your payment details - bank account number, PayPal address, and so on.

An invoice should provide in one place all of the information needed for your client to pay you in full, and all of that information must be correct to avoid any disputes later.

If there is any doubt about where you are sending the invoice, ask the client to confirm receipt - this is good practice anyway in larger companies where your invoices go to an accounts department, and not to the individual with whom you normally have regular contact.

You should never feel afraid to ask for confirmation that your invoice has been received, that there are no discrepancies in the details or total cost, and that it is being handled in time for the deadline.

In some cases, you may encounter clients who make payments on a certain date each month - and that may fall just beyond your stated deadline.

Be sensible in such cases; as long as they warn you in advance that this is the case, and pay when they say they will, it's probably best simply to accept this slight extension to your original invoice due date.

After You Invoice

A lot of what we've already said takes place after you issue the invoice, but once the deadline date arrives it's just as important to double check that payment has been received.

If not, contact the client immediately to check what has gone wrong - and remember, if your invoice was correct, there are no good excuses for why you have not been paid.

Be calm and professional, but make clear that payment is now due immediately, and if the response is not satisfactory, enforce any penalty clauses in your payment terms, engage a debt collector, and stop all work for the non-paying customer until their account is paid in full.

Over 150 Years Of Industry Experience

Our modest but highly skilled team has a combined total of over 150 years of experience in commercial credit management and B2B debt collection. From independent IT contractors to major film and TV publishers, Safe Collections has the knowledge and experience you need to get paid quickly and cost effectively.

Image "Bills, bills, bills" by flickr user David Hall is licensed under CC BY 2.0

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