One of the keys to business success is to be innovative without reinventing the wheel. To do so, you need to focus your creative resources on the areas that matter rather than wasting time on things that you can simplify using automation, inspiration, and templates.
One of the areas that businesses need to do well, but don’t need to put a lot of creative effort into is invoicing. Rather than creating a one-of-a-kind invoice from scratch, businesses can use a template to improve their invoicing process. What does a professional invoice template look like? Keep reading to find out.
Why Invoice Appearance Matters
Businesses use invoices to get paid for the work they do or the product they provide while creating a paper trail that is a necessity for reporting and taxes. So why does invoice appearance matter? For a number of reasons. The main consideration is the short attention spans that people have in our modern society. The easier it is for a customer to look at an invoice and know how to pay their bill without a fuss, the quicker they’ll do it. No one is in a rush to pay a bill, but by simplifying the process, it’s less likely that customers will put it off until the last minute.
Another reason invoice appearance matters are for the company itself. During tax season and any subsequent audits that take place, having a well-designed invoice ensures that all information is accounted for and easy to trace. If you don’t have a strong paper trail, you face the risk of fines or resources wasted trying to track everything down.
Finally, these various moving parts all contribute to your overall quality of customer service. A well-designed invoice that makes record-keeping easier for your customers will encourage them to keep coming back to your business.
Aspects of a Professional Invoice Template
Now that you know why looks matter when it comes to invoicing, it’s time to dive into the various components of a professional invoice template. Fortunately, there are a lot of industry-specific invoice templates readily available for you to customize for your business needs. Simply click for more to find one for your business.
Your Business Name and Address
The name of your business and the relevant contact information, including a phone number, mailing address, and email if applicable should be clearly indicated on your invoice. The reasoning behind this is that the organization you are billing will want to know who is asking for money.
Some businesses make the mistake of trying to create a design-heavy invoice that shows the organization’s logo and not much else. This can create confusion about who is sending the invoice, and people generally don’t want to pay something if they don’t know why.
The Recipient’s Name
Whether you’re invoicing a business or a person, you want to ensure that it’s addressed to the recipient. This ensures that they know that yes, this invoice is for them. It’s also important within the business to ensure that you have invoiced the right person and to create that oh so important paper trail for tax season. Your customer name should be incorporated into your invoice tracking system.
Clearly Defined Line Items
Remind people why they are paying you. As previously mentioned, if someone doesn’t know what they’re paying for, they’re less likely to pay it. Sometimes people genuinely forget about something they’ve purchased.
Clearly defined line items are essential when operating in a business-to-business environment, as the person within an organization who enlisted your services may not be the person who receives the bill. If your invoice is directed to an accounting clerk, they’ll have a better direction about who to talk to within the organization about the payment and can code it accordingly. In summation, your invoice doesn’t sit on a desk for as long.
Payment Amount and Methods
Obviously, people need to know how much they owe you. The payment total should be bolded and apparent, standing apart from any subtotals, shipping charges or taxes that contribute to the final amount. Additionally, tell people how they can pay you. This information can be less obvious, in smaller text perhaps, but still legible and easy to understand.
In addition to having how much someone owes you and how they can pay, whether it be by check, wire transfer or credit card, you also need to tell them when they are expected to pay you. If you’re in a business-to-business industry, you may have different terms for different agreements. Your customers may also have varying terms with other suppliers. Rather than risking getting your wires crossed, remind them (and you) of the terms on every invoice.
Invoice Date and Number
Finally, it’s important to list the invoice date and number. This is more so for your records than to benefit the customer. Having an invoice date and number strengthens that paper trail and makes it easier to look up information down the road. It can also help with organization and integrate into your invoice tracking system.
Notes and Niceties
Many invoice templates will include a notes section, which is integral if you do specialized custom products to outline anything that doesn’t fit on the line item descriptions. However, it can also be used for other purposes.
When you send an invoice, you have yet another opportunity to convey to your customer how much you appreciate their business. If you have the space available to do so, include a quick thank you note indicating your appreciation. If you have the bandwidth to add some personalization, do so– it stands out in a world of automated procedures. Not that you should disregard automation completely as it can greatly improve your invoicing process. Software like GetYooz can automate your whole invoicing process.
Early Payment Incentives
One way that many businesses improve their cash flow and streamline their invoicing is by adding early payment incentives on the invoice. For example, you may identify that if a customer pays more than a week before their invoice is due, they’ll receive 5% off their order. This information should be prominent with the payment terms and the amount due.
Another incentive that companies will often use is a discounted rate for customers who use a preferred payment method. Many companies will offer a discount to those using cash or e-transfers rather than credit cards to avoid processing fees. If you choose to go this route, be sure to have this information included in the payment terms, both up front and on the invoice itself.
A professional looking invoice template isn’t just about adding standardization throughout your business and conveying information to a customer; it’s about how you present it. For an invoice to look professional, there should be a lot of white space, making it easier to read than if everything is cramped together. Additionally, standard fonts, sizes, and colors simplify the reading process as well. Remember, the easier it is to collect information, the more likely your customers are to pay you.
An invoice template is also a great way to tie the sales process into your branding strategy. You may opt for a bold, colorful heading that fits in with your overall marketing scheme or prints your invoices on vintage-inspired paper to convey that you’re a traditional, family business. Take this opportunity to be creative and stand out in a pile of paperwork, but don’t make it too busy as to detract from the pertinent information.
Digital vs. Paper Invoicing
Ideally, you should use an invoice template that works for both paper and electronic billing, with a shift toward the latter. Electronic billing can save your business 60-80% of billing expenses, by reducing the need for paper, toner, envelopes, and postage. It can also improve payment time, as electronic delivery is instantaneous.
In addition to being a more affordable option, electronic billing is also an environmentally responsible option. As millennials are quickly becoming the largest group of consumers, and 90% of those surveyed indicated that they are more likely to buy from an environmentally conscious brand, it’s a win-win for businesses.
Not only as the shift toward digital invoicing made it easier for businesses to cut costs, but it has also opened up innovative ways to improve payment times. Some businesses are now adding QR codes to their invoices so that customers can pay with the click of a button from their smartphone. Digital invoices often include hyperlinks that can take customers directly to the payment portal of their choice, making their customer experience simple and expedient.
Once you’re comfortable with your base invoice template, you may choose to make it a part of your seasonal marketing campaign. Many companies are opting to use a seasonal invoicing strategy to increase sales with minimal effort. You may indicate a summer sale with a splashy, summer-themed design or ask customers to plan ahead for the holidays with a festive template in November.
The important thing to remember when using seasonal invoices is to ensure that you don’t alter the format of the invoice– all of the pertinent information should stay in the same place. Also, take a strategic approach to seasonal marketing, rather than creating something on the fly.
There are a lot of considerations to keep in mind regarding formatting on a professional invoice template. Additionally, there are some practices to follow to help build a rapport and encourage a positive working relationship with your customers. Here are some best practices for invoicing:
- Polite language – you are well within your right as a business to expect prompt payment for a service you have provided. However, as the saying goes, you attract more flies with honey than vinegar. Including polite language, such as, “please pay your invoice by this date” can have a positive impact on customers as it sounds more human.
- Identify payment terms in advance – while it’s important to remind your customers of their payment terms on every invoice, it’s also best practice to ensure they understand the terms before the transaction is complete. Many organizations will have this information worked into their contracts or transaction agreement, but it’s also worth taking the time to mention it explicitly during conversations; many customers will scan the information and sign it without taking the time to understand what they’ve agreed to.
- Create SOPs for invoicing – ideally, you’ll send invoices as soon as possible when the agreed-upon work has been completed. However, for small businesses with limited resources, that might be easier said than done. That’s why it’s important to have standard operating procedures (SOPs) in place for invoicing. Perhaps invoices will be sent out twice a week, or someone will have time set aside at the beginning of each day to process invoices from the day before. Unsurprisingly, having a professional invoice template will help this process immensely.
- Know who to send it to – take the time to find out who an invoice should be sent to within an organization, rather than sending it to reception to be sorted. If you have a direct contact, you decrease the time the invoice will be left sitting on someone’s desk. This information also helps you create a personal connection with the person who processes payment, allowing you to benefit from the human connection you create.
- Provide gentle reminders – it’s possible that your clients will be busy and forget about a pending invoice. It’s also possible that your client might put off payment until they’re held accountable. Whatever the case, keep a neutral tone and provide gentle reminders to your clients that they have an invoice pending payment. With the right system in place, you can even have automized notifications and reminders to do the dirty work for you. You can get ahead of this process by following up the day an invoice is sent to ensure that they received it.
Enhance Your Invoicing Process
Invoicing is an important business process that you can standardize using resources that are readily available. Even so, it’s often overlooked as a process that can be streamlined to decrease costs and improve payment times. Use a professional invoice template to streamline your business procedures and get paid faster.