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Anatomy of an Invoice Template: What to Include to Get Paid Faster

Invoicing isn’t the most exciting part of running a business. But it’s one of the most important things to get right. Good invoicing practice helps to avoid confusion and misunderstanding and ensures that you get paid properly. It also creates a paper trail for tax and for keeping tabs on your cash flow. 

The design of an invoice template can vary depending on the type of work you’re doing, or the payment terms you have with your client. However, there are a few basic elements that every invoice needs. We’ll unpack them for you below. 

Clear Labelling 

Although this may seem like a no-brainer, it’s always important to label an invoice clearly. Invoices that are lacking the word “invoice” might be mistaken for quotes or statements. You’ll only find out about the mistake when you follow up, meaning that you’ll only get paid once the confusion is resolved. 

Admin staff for large companies deals with hundreds of documents a day, so it’s easier to make that kind of mistake than you might think. When it comes to financial documents, clear, visible, and explicit labeling should always be a priority. 

Invoice Number

Every business uses its own system to identify its invoices. It can be as simple as “invoice 001” or something more complex. The point is, every invoice needs a unique identifier so that you can reference it quickly and easily. It will save you a lot of time, otherwise spent searching through folders and emails to find the invoice you’re looking for. 

It will also make it easier to address any invoice-related queries, differentiate between similar invoices, and keep track of outstanding payments. Your bookkeeper or accountant will thank you for it. It’s a small detail, but it makes a world of difference. 

Clear Payment Instructions

You can’t expect the client to know your preferred method of payment, and nobody enjoys having to ask for these details. Your invoice should detail how you want to get paid and provide all the necessary details for completing the payment. 

This might be your PayPal address, your banking details, or any other payment platform you might be using. Research shows that the more payment options you offer, the faster you’ll get paid, so consider offering at least three. 

This helps avoid payments getting made to the wrong people and ensures you get paid on time. If a client has to chase you down to figure out how to pay you, chances are you’re going to wait a while for that money. 

A Breakdown of Costs 

Aside from the total amount due, your invoice should give the client a detailed breakdown of the items that make up that total. This makes the client feel more at ease with the transparency of the transaction, as they know exactly what they’re paying for. 

This way, if a client’s invoiced for an amount they weren’t expecting, they can see for themselves what items are driving the price up or down. The more detail you include, the less likely you are to get confused or angry phone calls from clients who think they’re getting overcharged. 

List materials, labor, services, and other fees with their corresponding amounts. 

Summary of the Purchased Product or Service

This should be a small but detailed section that specifies exactly what the client is paying for, separate from the itemized price list. It may seem unnecessary, but a client needs to know exactly what the invoice covers. 

Whenever a financial transaction is made, it’s important for the client to understand what the invoice covers and what it does not. For example, you may have to send separate invoices if you’re providing multiple services. A clear description of what you’re charging them for avoids confusion. You don’t want the client to get a surprise when you send them a second invoice if they think they’ve already paid in full. 

Three Important Dates

Invoices need to be dated. Not just the date of the invoice, but other relevant dates as well. First, your invoice should include the date of delivery or purchase—the date that you supplied the client with the product or service they requested from you. 

Second, you need to provide the expected date of payment. Here is where you specify the deadline for payment from the client. Some invoices request immediate payment, while others give two-to-four weeks’ leeway. This helps avoid delays in payment and gives you ground to challenge late payments. 

Finally, you need to provide the date of the invoice itself—that is, the date you issued the invoice to the client. 

Supplier and Client Information

You need to provide all relevant information about your business and the clients. At the very least, ‌include the name of your business, your phone number, and your physical address. However, it’s never a bad idea to include other details like your email address, tax number, and other alternative means of contact.

The client’s details should include their company name and work address. You can add any other details that might be pertinent depending on ‌the transaction. 

Any Specific Terms and Conditions

If there are any unique or special terms and conditions that apply to the sale, be sure to include them in the invoice. One of the most important roles of an invoice is to serve as legal documentation of an exchange agreement between two parties. 

There should be no hidden costs or unclear terms. The more detailed and explicit your invoice is, the less confusion there will be, and the more protected you are if a client challenges it. 

Final Thoughts

Good invoicing practice is something that often gets overlooked, especially in small businesses where owners are responsible for managing payments. However, it is always worth getting this right from the jump. If you need a helping hand, there are plenty of invoice templates online that make compiling proper invoices simple. It is easy to include all the information above on these invoices since they are customizable. 

A good invoice will improve your chances of getting paid on time and in full. It will also ensure that you have accurate and accessible records of all incoming payments and protect you when dealing with difficult clients. 

If you follow the tips outlined above, you’ll save yourself plenty of trouble in the future. 

Finally, a good invoice communicates professionalism. You’re far less likely to get taken advantage of if you show your professionalism at every ‌point in the customer journey.

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"I finally feel on top of my financial situation. Never would I think I'd look forward to checking my accounts."
Ozei Evans

Success Bug Member

2022

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