Invoicing plays a key role in all businesses (it’s how you get paid) so understanding how they work, what to put on them and the different types is crucial. Here’s what you need to know:
What is an invoice?
In a nutshell, an invoice is a request for payment. It’ll usually cover the following details:
- Exactly what services or products were supplied
- Date of issue
- Unique invoice code for tracking purposes
- Cost breakdown or amount due
- Payment due date.
Aside from a payment request, invoices are also an important tax record.
Not all invoices are created equal
There are numerous types of invoices in the business world, used for different purposes. From recurring to interim to final and pro forma, understanding what invoice is right for your business will streamline your payment process.
Payment due dates are at your discretion but are best agreed on before any work commences or goods are provided. If you need quick payment for cash flow, seven days is a perfectly reasonable time frame. The end of the month is still the most common payment cycle for businesses.
Keeping track of it all
After sending an invoice, don’t just cross your fingers and hope payments will roll in. While most invoices get paid, it’s important to keep track of and reconcile payments against invoices. Fortunately, a lot of this can now be automated, so there’s no need to spend hours joining the dots between bank statements and invoices.
Keen to streamline your invoicing process? We can help.