How to invoice correctly

Billing a foreign client is not an easy task for a young business. Mistakes, inaccuracies and “unsure” English - all this will cause distrust. You can not be wrong.



To help you get started, we made a translation of the article about what the correct account should be. At the end you will find a link to download 10 invoice templates in English.

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We will be happy if this helps your business become more global.



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Congratulations! You got the project, worked hard, made a great product, the client is delighted. Now it would be nice to get paid!



While billing may not seem like the most exciting topic, it is undoubtedly one of the most important issues in any business. Your account reflects your corporate identity, reinforces your professionalism, is an additional point of sale that allows you to get more orders, and most importantly - brings you money. Once you start doing it wrong, you will not last long in business.



Many freelancers and small business owners have difficulty preparing bills - especially those who do everything for their business on their own.



In this article I will try, avoiding professional accounting vocabulary, to clarify this process, its practical aspects and some terms. In addition, I will provide you with 10 excellent account templates that you can customize and use right away. I will also show you some great methods that will make your life easier and help you to bill professionally.

Account: what is it?

The invoice, or invoice, is a commercial document issued by the seller to the buyer and containing information such as price and quantity of goods, payment methods and the maximum period during which the buyer must make a payment.



The seller is the supplier or executor of the services; and the buyer is the customer or client.



This document is important for both parties, because the seller needs to have a copy of it for keeping records, and the client for registering the purchase.



If you invoice - it means that someone owes you. If you get a bill, it means you owe it to someone.

What should the bill look like?

The type and language of accounts must match your corporate identity and the message you would like to convey. The account must match the design of your business card, letterhead, advertising slogan and even the colors of your site.



Even though the structure of the account depends on the industry, there are some general elements and rules that must be followed.



To make it easier to remember these rules, you can divide the bill into 6 parts.

Part 1: Your Details

It contains information about your company (or, if you are a freelancer, your full name), logo, contact details, payment information, etc.



If your company has a certain legal form - for example, a corporation in the United States or a joint stock company in the UK - then you need to include information related to the place of business. This is usually the legal address and registration number, but the rules vary, so check with your local tax office.



In Europe, if you are registered as a VAT taxpayer, you must also add the VAT registration number.

Part 2: the rules of the game

Here you can indicate such characteristics of the account as the date of discharge, full name, date, no later than which the payment should be made, currency and order number.



The term “net 30” is used in business to denote a payment within 30 days, but the notation “10/15, net 30” is quite common: in other words, it means a 10% discount when paying for 15 days and a payment period of 30 days



However, people less knowledgeable in business terminology may not know what this means. Therefore, depending on who your customer is, it’s better to use everyday language instead: “Please note that payment must be made no later than 07/09/2013.”



Also keep in mind that the date formats are different in different countries. The phrase “Payment deadline - 07/09/2013”, depending on the client’s location, can mean a payment in either July or September. To avoid ambiguity, try using an unambiguous expression such as “July 9, 2013”.



Another term that can confuse is “Upon receipt”. Freshbooks (developer of cloud accounting services - approx. Transl.) Conducted an interesting study , which resulted in: many people supposedly understand this term as "at your convenience."



“It’s as if they received an invoice with the words:“ To be paid after receipt ”and immediately dropped it into a bunch of“ anyway when ”. Instead, the use of certain terms - such as "21 days" - focuses the client on a certain period of time and actually allows you to get paid faster than asking to pay immediately. " - Zach Mathew.

Part 3: your client

This part contains the name and address of the customer to whom you are invoicing. If you are applying to a company with many offices, you need to specify the right person or department. This may not be the person with whom you spoke during the execution of the order. Therefore, in order to get you paid off faster, be sure to ask who will do the settlement with you.

Part 4: Title and Document Number

As a rule, the word is “invoiced”, but depending on the type, it can be “invoice” (bill), “invoice” (tax invoice), “proforma invoice” (pro-forma), “fast score ”(quick invoice) and so on. If in doubt, stick with the word "account."



Account number is a unique identifier used to establish compliance. As a rule, never use the same number for more than one document.



Some countries require that account numbers necessarily increase in chronological order. But they do not have to go in a row. If you do not want the customer to know how many orders pass through you, consider increasing the account number by a random number each time you issue a new account. So, your first account will be under the number "00007", the next - under the number "00012", then - "00014" and so on.



You can also add codes to your account number that will remind you that it is time to pay taxes. For example, “2013-06-WDD-002” can be decoded as: “Second invoice for Webdesigner Depot in June 2013”. It depends on you; Be creative and find the numbering scheme that best suits you.

Part 5: List of goods and / or services

This detailed list should clearly describe what you specifically charge for: the name (description) of the product or service, quantity, unit price, discount (usually indicated as a percentage), tax charge and total amount to be paid.



This description must comply with the conditions agreed with the client, so be as specific as possible.



Always double check your account for typos, errors in grammar and calculations, as they create a bad impression and can harm your reputation. Actually, check the bill three times before sending it.



One more thing worth paying attention to is the records of quantity and unit price: check the rules. For example, if a commercial company in the UK is registered as a VAT payer, then the rules of Her Majesty’s Tax and Customs Service on the part of invoices states that the price of a unit of goods must be included in the invoice.



If you charge an hourly fee, you can indicate the number of hours spent and the rate per hour.



Subtotals and totals including all taxes should be calculated at the bottom of the table.



Make sure everything in the bill is as clear as day. Because if the client cannot determine what he is offered to pay for, then your account will most likely end up in a heap of "sort it out later."

Part 6: Abracadabra

This is the place for your personalized message or note that describes payment terms more carefully. For example, if you can accept payments in more than one way, here you can indicate which method is preferable for you (check, bank transfer, PayPal ...).



Above all, this is a great place to say thanks. Remember that politeness matters, and it can really help you get money faster. Some studies claim that a simple “thank you” can increase the number of bills that are paid immediately by more than 5%.



Although late fees are not my favorite way of asking for timely payment, keep in mind that this can be specifically mentioned here. For example: “Subsequently, a penalty of 5% will be charged monthly.”

At last

Your account is an invisible marketing tool. Imagine how great it would be if you could make your document advantageously different from hundreds of others. Personally, I am more interested in working with clients who send me invoices made creatively. A well thought out invoice can make a payment to your address a pleasure.



To get you started, we have prepared 10 free templates for download. Remember to insert your corporate identity and personalize the wording for effective invoices that really work for you!





About the translator



The article is translated in Alconost.



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