You’ve finished a project, and now it’s time to send out the invoice and receive your hard-earned cash. But there are some common invoicing mistakes that many contractors fall foul of.
Don’t forget, your invoices will reflect on your business just as much as the original service. A lack of professionalism here could easily scupper your good work, and may even delay payment.
Here are five common invoicing mistakes to avoid.
1. Failing to itemise
Sometimes, contractors fail to grasp how large and complex other companies are. Even if you send your invoice straight to the person you’ve been dealing with, it’s probably going to get forwarded to their accounts team.
If you’ve simply invoiced for ‘work in June’ or ‘project’, your invoice is going to look unprofessional, and the accounting team may request an itemised document instead.
2. Erratic formatting
This is one of the most common invoicing mistakes contractors makes.
An invoice should tell your client how much they owe you, what they owe you for, how payment should be made, and when payment is due. It should do all that as succinctly as possible.
When a client receives your invoice, they should know exactly where to look to receive each piece of information.
If your formatting is inconsistent, every invoice is going to look a little different, and that’s only going to frustrate your client.
Using an online platform with set templates instead of writing your own will prevent that issue from arising.
3. Unpredictable timing
Contractors generally don’t need to be as meticulous in their schedules as large companies, mainly because they don’t have lots of separate departments that need to work together. However, you should make sure you keep to a strong schedule when it comes to your invoices.
Some clients will request that invoices are sent over as soon as a job is completed, but most will leave it to you to pick the date, so make sure you keep things consistent.
As a general rule, it’s a good idea to send your invoices out on the final day of the month. It’s easy enough to remember, and it means you won’t need to send multiple invoices in a small timeframe.
4. Vague payment terms
Isn’t it great when professionalism gets you paid? Unfortunately, many contractors forget to properly lay out their payment terms.
You need to let your clients know exactly how you’ll accept payment, and each invoice should include payment terms detailing legal information and any payment deadlines.
Smaller businesses already face longer waiting times for payments, so don’t leave any room for misunderstanding.
An invoice is unlikely to ever be seen by anyone other than you, your client’s accounting team, and possibly your own accountant.
That said, appearances matter, and typos are another one of the most common invoicing mistakes that will reflect poorly on your business.
It may seem unnecessary, but make sure you go through each document a few times to pick out any errors.
Again, it helps to use online invoicing platforms since you won’t need to write out much of the necessary information yourself.
Common invoicing mistakes: a summary
Avoiding these common invoicing mistakes will make you appear more professional to your clients, and should help minimise delays in payment.
If you’d like to know more about effective invoicing, or accounting more generally, get in touch with us today – we’d be happy to help.