Treat the invoice like a business letter. That is, you can have a professional header at the top, centered in the middle. On the other hand, a simple statement of your business name is also effective.
A fax number may also be relevant. If you accept payment services like PayPal, be sure to use the email you have set up with that account.
If it’s a person, use what information you have, but preferably their business contact information. If you don’t have enough information, you may need to contact the person or business with the information you do have to find out more. [3] X Research source If it’s a large company, you may want to call anyway to ask exactly who to address the invoice to.
One simple way is to just start out at one and work your way up. To keep the length of the number uniform, you could start with “0000001. “[5] X Research source Another method is to assign a customer number and then use the date. For instance, if the customer number is 305 and the date is February 2, 2016, you could use 305-02022016 as your number. Just make sure you’re clear on what the “date” should be. Is it when the service was rendered or when you created the invoice?
You can also include the billing period. The billing period is based on how you set up your invoicing. For instance, if you invoice once a month, that means your billing period is from the beginning of the month to the end of the month, and the services you performed during that period will be included on the invoice.
Organize by date. If this invoice is for more than one date, it’s easiest to organize by date. Put the date all the way to the left. Either way, you need to include the date the service was rendered. List the service. Next to it, list the amount you charge per hour or per service. You’ll also need the number of hours or the number of times the service was performed. Finally, put the total for that particular service over to the right in the charges column. Create a new line for each type of service. List other charges relevant for service, such as charges for parts.
In some states, you won’t need to charge sales tax for services. Check your local laws to find out whether you need to charge it in your area. Also, it may very by the type of business. For instance, you may not need to charge sales tax if you’re a nonprofit. It also may depend on whether the primary object of the sale is the service (such as at the dentist) or the equipment (such as in computer repair). [11] X Research source Taxes are usually charged in the place the service was performed, so if you go to a customer’s place of residence in a suburb, you must use that city’s sales tax. However, again, always check your local laws. [12] X Research source Sales tax is a percentage. To figure out the tax, you multiply the subtotal by percentage, expressed as a decimal. For instance, if your total is $50 and the sales tax is 8. 25%, you multiply $50 by 0. 0825 to get 4. 125. Round the number off as needed. Here the tax would be $4. 13. Add the tax in. Next, you add the number you got to the original subtotal. In the example, you add $4. 13 to $50 to get the grand total of $54. 13. [13] X Research source
Payment should always have a due date with a consequence if not met (for example, interest charged on late payments). You might also include an incentive for early payment (like a 2% discount if paid in ten days), since most small businesses have constant cash flow problems. You should also discuss whether you have a payment plan option. You can include the information with the letter, or write something like, “If you can’t pay your bill all at once, call our office to set up a payment plan. “[17] X Research source
Invoices should be coordinated with accounting system. An invoice, once written, becomes an asset of the company (Accounts Receivable) and should be properly recorded. If you use accounting software, you may have the option to let the software create an invoice for you. [19] X Research source Services like PayPal also have built-in invoice creation. [20] X Research source
You can also send out reminders through the mail. How many you send out before a “final payment” notice is up to you. It’s important to reiterate you have a payment plan option if you’re willing to let the client pay it out over time. Once you’ve sent out as many as you’re willing, you can send out the “final payment” notice that lets the client know you’re turning it over to a lawyer or collection agency. [21] X Research source To establish a system, try having specific collection actions spaced out regularly across your collections period. For example, try sending notices after the balance has gone unpaid for 15 days, 30 days, 45 days, and so on. Each can specify how many days are left until payment and what actions will be taken if the balances goes unpaid. Try sending at least one notice by certified mail, so you know the client received it.
You can also send out reminders through the mail. How many you send out before a “final payment” notice is up to you. It’s important to reiterate you have a payment plan option if you’re willing to let the client pay it out over time. Once you’ve sent out as many as you’re willing, you can send out the “final payment” notice that lets the client know you’re turning it over to a lawyer or collection agency. [21] X Research source To establish a system, try having specific collection actions spaced out regularly across your collections period. For example, try sending notices after the balance has gone unpaid for 15 days, 30 days, 45 days, and so on. Each can specify how many days are left until payment and what actions will be taken if the balances goes unpaid. Try sending at least one notice by certified mail, so you know the client received it.
