Your business is growing and now you want to transition into a more professional operation. Maybe you’ve even hired contractors or employees to help make this happen.
Needless to say, your expenses are increasing about as fast as your client base, which is great. But only if you can get paid on time. A part of ensuring this is implementing a professional invoicing system.
Knowing how to invoice a client is critical to getting your bills out on time for prompt payments. However, if you’ve been solely getting informal payments via email or over the phone, then it’s time to switch things up.
In this article, we’re going to cover how to invoice a client professionally.
So let’s jump right in!
Skip Over Manual Invoice Creation Tools
You’ll find a lot of business owners who start out creating their own invoices using online and offline word processing tools. But going this route only slows things down and makes your job harder than it needs to be.
This is why our first recommendation is to get a professional invoicing tool. Not only will this cut down your invoicing process tenfold, but it’ll also make getting paid a whole lot easier.
For example, invoicely is a platform that allows you to quickly create professional-grade invoices in just a few clicks.
Then you can keep track of all the invoices you send out to monitor which bills are still pending for payment. You have a lot to focus on as a business owner so why not eliminate billing and collecting from your list of daily tasks?
Plus, sending these automated invoices can make your business look corporate, even if you’re only a small or medium sized company. Not to mention, you can receive payments through the invoicing platform using plastic or an online payment portal like PayPal.
Include All the Proper Details in the Invoice
Now, when it comes time to create your invoice—whether you’re using a tool or desktop software—it’s essential to put all of the correct details on it. This includes information about your business, the client, and the total.
In your invoice, you want to identify your business with a logo, business name, address, and contact information. You can line this up on the top right corner of the invoice like you would address an envelope.
Then on the other side, you can put all of the client's information, including the contact name (the one responsible for paying the invoice), phone number, and address.
Be sure to number your invoices in a sequence so your invoices are easy to manage and track. You can use a combination of letters and numbers, special codes, or just numbers.
When you use an invoicing tool, these numbers are conveniently auto-generated for you.
It’s also good practice to outline what you’re charging your client for. An itemized list is key so you can include details and the rate.
Don’t forget to include client-related expenses you incurred while providing the service.
Then follow it up with a subtotal. Don’t forget to break down any extra fees you charge, such as taxes.
Eliminate the Possibility of Disputes
By being upfront with your invoicing process, rates, and additional fees you charge, you can minimize the instances of disputes. This includes going over how long clients have to pay your invoice once they receive it.
The more thorough your invoice, the less room there is for interpretation. And when everything’s as clear as day, you’ll have a less chance of disputes arising.
Some of the ways you can clarify everything is to include key details in each of your invoices. This way, if new people come along and take over your account, they’ll know everything they need to know to process the bill.
Your invoice should include all of your information and contact details, the services or products provided, discounts attributed, fees added, and methods of payment.
If you’re using an online invoicing platform, then you can accept payments digitally. This is convenient for your clients, who can click to pay right from the email you send.
Your invoices should also include an itemized list of services/products provided, along with the descriptions for each. You don’t want your clients to question any charge on the invoice due to miscommunication.
Accept Different Forms of Payment
Speaking of payments, you want to make it so that your clients are able to take care of your invoice in a way that’s convenient for them.
The internet makes it so that you can accept all sorts of electronic payments, including debit/credit card payments, bank transfers, and payments from online portals.
Invoicely allows you to accept payments from various payment platforms, such as PayPal, Stripe, and more. The more forms of payment you accept, the easier it’ll be for your customers to pay your invoice quickly.
Accepting varying forms of payment will also make your business more professional.
Establish Your Payment Terms
It’s important to have rates that are consistent so your clients don’t feel you’re nickel-and-diming them. Have your rates within your payment terms. Then you need to determine the length of time you want to give clients to pay you.
Some businesses give their customers a few days, a week, two weeks, or even 30 days to pay their invoice. What you decide will be determined by the industry you’re in and type of project or service you offer.
It’s also a good idea to see what others in your industry are doing. This way, your terms are similar or more enticing than what your competitors are offering.
Once you know your payment terms, you can write it up into a document for you and your clients to reference. Or you can even have them sign the document before a project starts to ensure they’re well aware of your terms.
Manage and Track Your Invoices
It’s not enough to simply email or mail out your invoices. If you’re not properly managing them, then you won’t be able to track them accordingly.
There will come a time when a client won’t pay on time. You’ll need to quickly address the issue so that it doesn’t turn into an unpaid debt.
By numbering your invoices in chronological order, it’ll be easier to find invoices. But keeping an eye on which are paid and unpaid can be a real hassle.
This is another reason why incorporating software is helpful. This will manage all of your invoices in one place and help you to track what’s paid and what’s unpaid.
You can even set up automated reminders so your clients don’t forget to pay. Then in your dashboard, you can quickly see which invoices are still pending so you can reach out to the clients who’ve yet to pay you.
Have a Plan for Late-Paying and Non-Paying Clients
It’s not a circumstance any business owner wants to be in. But there will more than likely be several occasions where your clients fall behind on payments.
Knowing your plan of action at this time is critical. For example, you can charge late fees. Some businesses charge a percentage of the total price (i.e. 3%).
This sometimes helps to deter clients from paying late. But there are others who still don’t pay up. So what do you do when they refuse to pay?
If you’ve tried sending reminders and reaching out to inquire about when payment will be received and still nothing, then you need to step it up a notch.
For example, you can escalate the matter by filing a civil lawsuit. Or you can hand over the account to a collection agency.
Either way, it’s a good idea to write a letter of intent to the client letting them know your planned course of action. If this doesn’t stir them to contact you about setting a payment date or schedule, then proceed.
Sending Clients Professional Invoices
Now that you have some insight on how to invoice a client, you’re ready to set up your system. You can either try to create, manage, and track all of the invoices on your own.
Or you can opt to use an invoicing system. The latter is the best way to go if you want to save time and increase your chances of getting paid promptly.
Be sure to thank your clients for their business in your invoices. And consider offering an incentive for them to rehire you again.
For example, giving them a discount for their next service/product.
The more professional and courteous your invoicing process, the higher the chance of them returning to your business.
So use the tips and tools mentioned in this post to help you establish a professional invoicing system. Then let us know in the comments how well it works for your business!