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Monday, December 2, 2013

What type of information does your invoice absolutely have to have?

Complete invoices track transaction history
Invoices should provide a complete transaction record
By Erin Steiner

If you've never had to build your own invoice before, the process can feel incredibly complicated.

As you scroll through templates and forms online, it seems like there is so much information that you need to include (or even come up with for the first time)!

The truth is that your invoices do not have to be complicated at all.

Details


Your invoice needs to contain, at a minimum, the following information:
    • The date
    • Your/your business's name and contact information
    • Your client's name, contact information, and account number (if you assign account numbers to different clients)
    • What you're billing for
    • The cost of that item or service
    • Total amount due
    • Payment instructions
    • Payment due date
    • A tracking number
Invoice details explain transactions
Itemizing invoices clarifies costs
If you are billing for more than one item or service, you will want to make sure to list them individually and include each item's cost.

Ensure that in addition to listing each item/service on your invoice, you write a brief description of those items and services. This way, even if you list your items by inventory numbers, your customers will know exactly they are paying for.

It's good to itemize the total due. This should include a subtotal of items sold, any charges for taxes or other fees, etc. This way the customer can literally see why the total amount due is different than the total amount of each item sold.

Including a sentence or two that explains exactly how the client should pay you is important - especially if the types of payment you accept are limited. A simple "Send checks to ... " or "Make your payments online at ... " is usually sufficient. If you don't want your clients paying in cash, make sure you mention that, too.

The due date is imperative. Without a due date, your payee can drag their feet and pay you whenever they feel like it (even if that is years from now). A due date allows you to charge late fees if they do not pay you before the date you've listed. It gives you legal standing if you have to take a client to small claims court to get payment from them.

A tracking number allows both you and your clients to literally track how much you have billed and how much they have paid. It makes it easier for everyone if someone has a question or concern about the invoice you've sent. It is also helpful, if accepting check payments, to ask the client to write the tracking number on the check so you know which account to credit.

Formatting


If you wanted to, you could simply type all of this information into a Word document or even write it down on a piece of paper and call it a day. Some companies will use Excel to create a template. Most professionals, however, prefer to use online invoicing software to help them create a professional-looking document. This way you simply input the information asked for by the software and click send!

Still, it's good to know what to include should you ever find yourself without access to your software. Computers do still go down once in a while


About the author: Erin Steiner is from Portland, Oregon. She covers small business, pop culture, and many other topics for a variety of different websites.

Image licenses: Wufoo Team, CC BY 2.0; 2. Keith Ramsey, CC BY-SA 2.0  

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