Your Sales Invoices Get You Paid
Sales invoices are incredibly important. If you don’t send them to your customers, you’re not likely to get paid!
If the information on your sales invoices is incorrect, your payment could be delayed. Make it as easy as possible for your customers to pay you.
If you use a computerised accounting system, all the required information is entered when setting it up. But it might be worth printing out one of your invoices periodically, just to make sure.
Each invoice is required to have a unique number, this is usually a sequential number, and will be supplied automatically on a computerised system. Otherwise you will need to find a way to make sure you give each invoice you issue has a unique number.
It’s good to have your logo showing prominently on your invoice so that your customers instantly recognise who it’s from.
Make sure your company name and postal address are correct and easy to read, usually at the top of the invoice. If you accept cheques, your customer may delay payment if it’s not easy to see where to send their payment.
If you’re an incorporated company, make sure your registered address is shown, (usually in small print at the very bottom of the page) along with your company number.
Check the customer’s name, address and email address are spelt correctly. If the customer uses several postal addresses or has several email addresses, make sure you are sending the invoice to the right one. If you’re not sure which address to send it to, it is worth the extra couple of minutes finding out, rather than having it returned (or never opened) to be credited and re-issued, delaying the receipt of payment.
The invoice should be dated. Many companies save all their invoicing until the end of each month and do them all in one go, dated the last day of the month. If possible, invoice the customer as soon as you’ve sent the product or completed the work. This brings the payment due date forward, helping to ease your cash flow.
If you’re VAT registered, your VAT registration number has to be shown on your invoice. This is because if it’s not and the customer is VAT registered, they will not be able to reclaim the VAT portion. Obviously, nobody wants to pay VAT if they don’t have to.
Whilst on the subject of VAT, if you’re registered, the value of the goods or services should be shown excluding VAT. The rate of VAT and the amount is then shown separately. It goes without saying, the total amount payable, including VAT, should be clear and easy to see.
Describe the goods or service being supplied. It can be hard to find a middle ground here (especially for services), too much or too little information can lead to disagreements of what was actually decided in the first place. The more invoices you supply, the easier this will become.
Once a sales invoice is received, many customers will automatically assume the terms of payment are 30 days no matter what is printed on the invoice. If your terms of payment are different to 30 days, make sure your customers understand this before the transaction takes place. Then clearly state the terms of payment on your invoice along with the date you expect to receive it. Then, if you don’t receive it by this date, you can contact the customer and refer back to the information supplied on your invoice.
Lastly, the easiest way to receive payment is directly into your bank account. Make your bank details stand out.
- All information on your sales invoice should be correct, quick to read and effortless to understand.
- Number sequentially.
- Make it easy for your customer to pay you.
Oct 14, 2013