How to Make a Business Invoice: Professional Billing Tips for Faster Payment
Small businesses need to make accurate invoices to request payment from their clients. To make a business invoice, business owners should develop their own professional-looking document or use a premade invoice template. A business invoice should include all the important financial accounting details clients need to make a payment, including an itemized list of the services provided, a deadline for payment and the total amount due, with applicable taxes. Creating an invoice that’s professional, easy to read and well laid out will help you get paid faster for your services.
Follow these tip on how to make a business invoice and start getting paid for your work:
How to Make a Business Invoice in 8 Easy Steps
Freelancers and entrepreneurs need to make professional business invoices to request payment from their clients. Follow these simple invoicing steps and get started billing for your services:
1. Add Your Logo
Create a header for your document and add your business logo at the top. If you’re making a business invoice in Microsoft Word, you can select a Word invoice template that will include a header with space for your logo.
2. Include Your Business Information
Also in the invoice header, you’ll need to add your business’s contact information. Include your business name, address, phone number and email address in the header.
3. Add Your Client’s Contact Details
Directly below the header, add the client’s contact details on your invoice. Include the correct contact name, which could be someone in the company’s billing department rather than your daily business contact. Also include the address, phone number and email address of the client.
4. Include the Invoice Date
Add the date you’re preparing the invoice to the document. Include it below the client’s contact details.
5. Specify the Payment Due Date
Include the payment due date on your business invoice and make sure it stands out when compared to the invoice date. Use a bold font or a different font color to make it pop from the page. Be specific with your payment due date: write out the date in full, for example “Payment Due December 31, 2018” rather than using vague payment deadlines like “Payment Due in 30 Days.” Clear dates are less likely to confuse clients.
6. List Your Services
The main section of your business invoice is an itemized list of the services you provided. Include the following in this portion of your invoice:
- A brief description of each service
- The number of hours worked or the quantity sold
- The rate of pay
- A subtotal of charges for each service
7. Add the Total Amount Due
Add up the total amount due for the invoice, including tax. Write the total on the invoice in a large, bold font so that it grabs your attention when you glance at the page.
8. Include Your Payment Terms
List your payment terms at the bottom of your invoice, including the payment methods you accept. If you plan to charge late fees for past due invoices, outline the specifics of your late fee policy here, as well. It can also help to add a polite thank-you note. A study by FreshBooks found that including a thank you on your invoice increases the chance of getting paid by five percent.
Professional Invoicing Tips to Get Paid Faster
Now that you know the basics of creating a business invoice, here are some invoicing tips to help your small business get paid faster:
1. Track Your Time
If your business bills clients by the hour, it’s important that you develop a habit of tracking your time for every project you work on. Keeping careful records of the hours you work will ensure your invoices are accurate. And, if a dispute ever comes up with a client, you can refer to your detailed notes to show how you spent your time while working on the project. You can track your time manually, writing down the start and end time each time you work on a project, with notes on what you did during that time. You can also download apps and browser extensions to record your time digitally. Or, if you use a cloud-based accounting solution, you should be able to easily track your time within the software.
2. Invoice Promptly
Make a habit of invoicing clients as soon as a job is completed. That way, the work will be fresh in both your minds and there’s less chance of making an error on your invoice. The faster you get invoices out to clients, the quicker you’ll receive your money.
3. Charge Late Fees
Charging late fees can be the incentive some clients need to pay their bills on time. Just make sure you discuss your late fee policy with clients at the time of signing your contract, so they aren’t taken aback when your first invoice arrives. A common late fee policy is to charge 1.5 percent per month on overdue invoices.
4. Accept More Payment Types
The more flexible you are with your payment methods, the easier it is for clients to pay you in a manner that’s convenient to them. And when it’s easier for clients to pay, they’re more likely to pay quickly for your work. Consider accepting credit card payments and online payments as well as more traditional payment methods like cash and checks.
5. Allow Automatic Payments
Consider setting up an automatic bill payment system for any clients that you invoice every billing cycle. Automatic payments allow clients to authorize payments on a set schedule, so they don’t have to worry about paying bills manually every time you send an invoice. It ensures you always get paid on time.
Business Invoice Example
This sample business invoice from FreshBooks shows you all the important information you need to include on invoices and how to format your document:
Free Business Invoice Template
If you don’t want to go through the trouble of creating your own invoices from scratch, you can download and customize a free business invoice template to do the heavy lifting for you. Download your free invoice template from FreshBooks in Word, Excel or PDF format and get started billing clients for your work.