As a business owner, issuing an invoice is something that you have to do frequently. It is one of the most essential tasks you perform. That is the number one reason you should learn how to create invoices for your online business.
Invoices are legal documents that contain a list of goods and services that are provided and are issued before any payment is done. The objective of using invoices in business is to receive payment for services or products rendered. As a business owner, developing good invoice habits is important to ensure that you do not have any unpaid invoices.
Traditionally, businesses created invoices manually. Unlike then, the online world has given way to online invoicing apps that make it easier to create an invoice on-the-go and reduce the amount of time spent on invoicing. They also help you keep track of your invoices and create reminders for invoices that are almost due.
How To Create Invoices Online
Before I share more on how to create invoices, I want to ensure you know the key parts of an invoice. Check out below so you can familiarize yourself with it.
Key Components Of An Invoice
Whether you are creating an invoice online or doing it manually, there are certain components within the invoice that are important to include.
- Header: The word “INVOICE” should be at the top and it should be in large letters. most clients often go through a huge number of documents each day. Putting the words in large letters helps signal them of a payment that needs to be made.
- Invoice Number: This is a unique number or code generated by a business that helps you keep track of your invoices for the purposes of payment. The invoice numbers vary from business to business. This means that you can decide on what numbering system to adopt to keep track of your invoices
- Dates: When creating an invoice, it is key to include the date the invoice was issued and the due date. The due date is to encourage the clients to pay within a particular date whereas the date of issue marks the day a product or service is offered to the customer.
- Your company details: Your phone number, email address, company name, company logo, and mailing address are some of the details to include in an invoice as they represent your brand.
Ensure that your company name is in bold a slightly bigger font so that it stands out. This information also helps your client identify whom they received the services/products from and whom to send payment to.
- Your client details: The client’s details should include their name, address, phone number, and email. This helps your client know that the invoice was sent intentionally to them.
- A list of all purchased products/ services: If the invoice is for a purchased product, it should include the product name, a description of the product, its quantity, price per unit, and total price.
If it is for a service, then it should include the name of the project, a description of the work done, and payment for the services. This list should have the invoice total at the end.
- Terms: In an invoice, it is important to state any terms necessary. For instance, payment terms can be included informing the client of the expectation of payment within a particular date and what is likely to happen if payment is not made within this period.
- You could also use this section to map out any discount rates that you may have offered your client.
How To Create Invoices
Invoices may differ depending on the services rendered, products sold, or on a time basis. However, it is key to know how to create an invoice whether you are using a PC, tablet, or phone. Here is how to create an invoice.
Step 1: Populate the invoice with your basic information
The names, addresses, and contact information are part of the basic information that you need to include in an invoice. This could be your company/business name, phone number, email address, your company logo, website, and a physical address if available.
Step 2: Populate your customers with basic information
Your customer’s information could be their business name/company name or the name of the person to whom the invoice is being billed to, their address if any, website, email address, and phone number.
Step 3: Indicate the title and the invoice number
The word Invoice should be in capturing font size. This helps the recipient know the purpose of the document even before going through it. Every invoice you create should have an invoice number. This is a unique code or number which helps with keeping track of your invoices.
Step 4: Clearly indicate the dates
In an invoice, dates are very important. The date that the invoice is created and when it is due should be included in an invoice. They communicate how much time the client has to pay for the services/products.
Step 5: List down the services/products offered
The services offered should be described in the description box capturing all details including payment rates and dates when the services were rendered. For products/goods, describe them as they are, include their quantities and prices. The totals should also be clearly written so that the client is able to note this with ease.
Step 6. Clearly Highlight the payment details
The purpose of creating an invoice is to facilitate payment for products or services rendered. As such, it is paramount to highlight the payment details. That is terms of payment indicating the date when the payment is due or any discounts that you have offered, bank details or account details where the amounts are to be sent.
If you offer online payments, you can include this information as the client might find it easier and faster to make the payments.
To increase the rate at which your clients pay up, ensure that you indicate the exact amount of time the client has to pay, be prompt to send the invoice so that your client has enough time to settle their dues, and be polite.
Invoicing Tips to grow your business
- Share quotes with your clients. Sharing quotes with the client before the finalized invoice can help you reduce disagreements with the client. It is important as an online business owner to ensure that your client understands what services will involve and using the quotes, you can make adjustments until they are fully on board. This helps eliminate assumptions and the client is not caught by surprise when you send your invoice to them.
- Send a detailed invoice to your client. Every invoice that you send to your client should clearly map out all information that you have agreed with the client. It is not a wise idea to send an invoice with additional payments that the client is not aware of.
It is key to clearly mention all products/services that the client purchased, the due date, the amount to be paid, and company information. Ensuring that the correct information is received by your client will help them build more trust in your company and desire to work with you more.
- Brand your services and include all the important details. Your invoices not only communicate the services that you are offering, but they also represent your brand. As such, it is paramount to indicate your company details clearly and additionally include your company logo.
- Be courteous and polite. Being polite has a positive impact on your clients and shows how professional you are. This can be done by using words such as Please and Thank you.
- Send a payment acknowledgment. To further your relationship with your clients, you can send a follow-up payment acknowledgment informing that you received the payment they made. This goes a long way in building relationships with your clients. You can also send specialized seasonal messages when appropriate to grow a positive relationship.
- Be swift and prompt when sending invoices. You can send an invoice to your client within any time period. However, doing it as soon as possible is ideal.
- Politely follow up on overdue payments. Asking a client to pay up is never an easy task. It is possible for you as a business owner to feel nervous and somehow shy away from asking for payment. However, it is not wrong to remind your client in a polite way about their overdue payment. You can do this by reaching out to them personally or sending a payment reminder if you are using an online tool.
- Use automated Invoicing. Doing your invoicing manually can be very hectic and takes a lot of time as well as paperwork. In place of this, you can use invoicing software or online tools to make invoicing more efficient.
The benefit of using automated invoicing is that you can create quotes, create invoices, and send them while on the go. You can access the invoicing tools wherever you are. You can send the invoices you create from the software directly to the client’s email where they can view it. For example, you can learn how to create an invoice in Quickbooks and send directly to your client.
Related: 6 Easy to Use Invoicing Software
Another benefit is, the ability to create reminders. Using an online invoicing tool, you can set reminders based on the invoice due date or few dates to the due date. This way, you have an easier time keeping a record of your overdue invoices.
Knowing how important invoices are to your business, it is paramount to understand how to create an invoice in Paypal or QuickBooks. Invoices are tools that you use as a business owner to receive payment for services or products offered. They may vary from invoice to invoice but there are things that are common. For instance, your company details, customer’s details, invoice number, dates, descriptions of services/products, and payment terms.
As a business owner, it is not possible to ignore invoicing as a task. It is a necessity for every business and understanding how to create one is a good place to start. And that is how to create invoices for your online.