Consider the humble invoice. It is, of course, the means by which you get paid. But did you realize the verbiage on your invoice might affect whether you’re paid in a timely manner? Your invoice is also one of your primary means of communication to your clients, and it has a lot more impact than you might think, so don’t underestimate it!
The first thing your invoice needs to do is communicate its primary message to the client – there is a balance owed. The invoice verbiage needs to be clear and the information presented in an easily findable, reader-friendly format. Here are some invoicing tips that can make a positive impact.
Be sure your humble invoice shows business contact information, including phone number and email address to where any questions should be addressed.
Invoice verbiage should also have the payee’s business contact information, including if possible the person with whom you worked or the Accounts Payable point of contact. It’s easier for an invoice to get “lost” with no specified owner.
Next, consider the Payment info. How much is owed? When is payment due? What methods can they use to pay? These items should be obvious on the invoice. Also include any payment terms or credit policies, and any penalties that will accrue if a payment is late (or early – some businesses offer a discount if an invoice is paid in full within a certain number of days). Use verbiage that makes all of this as clear as possible in laymen’s terms.
Make sure your invoice verbiage states a clear explanation of the charges. Using terminologies like “Services” or “Order #HJAFKUSVJF” have little meaning and may create more confusion. Your client needs a clear reminder of exactly why they owe this money. It’s a busy world – don’t force them to try to remember what business they had with you. If you do, you may find that they just don’t have time to think about it right then, and who knows when they will? Include a small but clear description of the work you’ve done for them. It’s also a good idea to show how charges are calculated (e.g., 10 @ $10.95 = $109.50), including any interest or tax, and to show the client’s payment history if they’ve already applied a partial payment.
Convey a sense of gratitude. It’s always a great idea to thank clients for their business and ask for return business, and your invoice is an ideal place to do so. Include a message like ‘Thank you for your payment!’ or ‘Thank you for your business!’ as a standard item on your invoice.
Avoid sending your invoices late. If you expect timely payment, your client expects timely billing. This also helps them to recall what services you performed for them, and your bill reaches them when they were expecting it. If you put it off too long, their financial situation could change before they get the bill.
Another invoicing pitfall to avoid is conveying a lax attitude about payment with your invoices, and it’s remarkably easy to do so. One way to convey the wrong message is by using a standard like ‘Payable upon Receipt.’ What does that mean to the client? Whatever it might mean, it does not convey any sense of urgency, inspire the client to pay right then or even motivate them to schedule a payment soon. Be sure your invoice has a clear due date.
Another way a lax attitude is easily conveyed is to show balances in boxes labeled 60, 90, and 120 days late. It seems like good information to have on an invoice, but a set-up like that might easily make the client think it’s all the same if the payment is made in 120 days as it would be if they paid right now.
As you can see, there’s plenty to think about when it comes to the humble invoice. The main keys to an effective invoice are to make sure that everything about the payment is clear and accessible to the client and that you’re managing payment expectations. The purpose of an invoice is to be paid for the work or services you’ve delivered, so make sure your invoice verbiage inspires action!