If you are a small business owner, then you will need to develop excellent invoicing skills. An invoice is a document given to the buyer of a good or service by the seller in order to collect payment. The document contains details of the good or service, as well as the names and information of both parties, and, of course, the price and terms of payment.
Invoices are used to track purchases and sales, maintain financial records, provide legal protection in case of a dispute, ease tax filings, and provide data for business analytics, so it’s important to learn how to write and use them effectively. To help you master the art of invoicing, our team at Balanced Bookkeeping of NC has put together this article to go over a few common mistakes to avoid.
- Sending Invoices Late – One common invoicing mistake is not sending your customer the invoice promptly. We recommend sending an invoice as soon as possible in order to avoid confusion or disputes over payment. For example, many freelance writers require clients to pay a certain amount in advance, with the rest due upon completion of the work. Other businesses send invoices as soon as the work is complete.
- Unclear Terms – Another mistake people often make when writing invoices is making the terms of payment unclear or ambiguous. There should be no room for interpretation in your finished invoice—instead, everything should be clear and easy to understand. We recommend against using industry jargon, and instead encourage you to keep the language simple and clear.
- Lack of Backups – A third common mistake we see when it comes to invoicing is failing to make backup copies of your invoice files. We strongly encourage you to switch to digital invoices if you haven’t already, and to save copies of all your invoices to a separate hard drive to make sure they won’t get destroyed if your computer should crash.