What Is an Invoice?

An invoice is a formal document used to request payment from a customer for products or services provided. It comprises the total outstanding amount, due date, and payment terms to help the buyer understand how much they need to pay.

Most businesses share online invoices, including a payment link, to get paid on time without any physical meetings. Typically, an invoice is shared upon completion of the work or immediately after the delivery of the product to notify the buyer about their pending dues. Basically, it serves as a payment request from the seller to the buyer.

10 Invoicing Best Practices to Consider for Your Business

Sick of paper-based invoices that only lead to payment delays? Here are some of the best way to invoice clients and get paid promptly, eliminating the hassle of chasing unpaid invoices unnecessarily.

1. Prioritize Online Invoicing

As soon as your business grows and you have multiple clients to deal with, invoicing becomes tedious, making it difficult to manage invoices in bulk. Therefore, it is a common practice to adopt an online invoicing process instead of maintaining spreadsheets or relying on other manual methods.

Businesses that adopt e-invoicing have improved their work productivity and managed to collect payments more quickly. The automated invoicing process makes it so easy to invoice a client that you neither have to meet them personally nor spend time on frequent revisions, which you often encounter while making paper-based invoices.

2. Use Customizable Invoice Templates

An invoice has to be clear and understandable in one go and should not result in back-and-forth. Since paper-based invoices neither meet any of the requirements, it’s better to go with customizable invoice templates. Selecting the right templates as per your business needs will enhance professionalism and eliminate the need to create an invoice from scratch.

Businesses or freelancers can choose an invoice template that aligns with their industry and create beautiful invoices that attract payments faster. Plus, an invoice made using a template has no chance of misplacement, helping you keep an accurate record of business finances.

3. Add the Correct Due Date & Amount

It doesn’t matter which method you choose to make an invoice, one thing you should not overlook is adding the correct dates and amount. Always check if the invoice date, due date, and outstanding amount are correct before sharing an invoice with clients. Otherwise, minor negligence can lead to customer disputes, delaying the payment by weeks or even months. That’s why modern tools and software have seen a significant rise in their use.

No business wants their clients to land in disappointment because of inefficient billing best practices. So, what could be better than getting reliable invoicing software as far as customer satisfaction is concerned? Modern tools and software ensure you don’t spend time on manual calculations, minimizing potential human errors and increasing customer satisfaction. Hence, no wonder why you need software that aids you in mentioning correct data and due amount.

4. Provide a Unique Invoice Number

Always mention an invoice number when you generate a new invoice. Assigning a unique invoice number to every invoice you make will help you keep financial records well organized. This invoicing practice will also make your invoice tracking smoother, especially when you are dealing with a large volume of invoices. This way, you don’t have to waste more time in collecting invoices and can generate a report seamlessly to get insights into changing sales patterns.

In addition to that, this practice facilitates the auditing process, helping your accounting team to focus more on what really matters.

5. Write Clear Payment Terms

Defining clear payment terms is another effective invoicing practice. By implementing this practice, you can make sure clients pay their dues timely. Highlighting the late fees along with the due date will surely inspire them to complete the payment as quickly as possible. Also, if you have written payment terms in an invoice, there won’t be any disputes regarding payments. Ultimately, this practice will save you time as you no longer need to chase payments or indulge in phone calls.

Payment terms are easy to read when written on digital invoices rather than adding in hand-made copies. Thus, helping clients understand how soon they need to clear the payment.

6. Allow Customers to Pay Conveniently

The moment you create an invoice it was intended to collect the payment from the customers. So, your job isn’t just to prepare an invoice but also to offer customers a preferred payment method to get paid early. Attach a payment link to an invoice so that customers can pay their dues with a single click of the button. If needed, you can add their preferred method such as Apple Pay, Stripe, Cash App, credit card, or debit card.

With online payment options, you can save your as well as the customer’s time because both parties no longer need to conduct physical meetings. Clients can pay the money online from anywhere, eliminating the need to carry cash. In short, you need to offer a payment method that enables clients to make a payment smoothly.

7. Review the Invoicing Process

Examining closely how you invoice clients on a regular basis will help you discover loopholes in the process. For example, if you start reviewing the invoicing process every month, you may find answers to the late payment queries that you definitely want to get rid of. The reviewing process also assists you in what you need to optimize when invoicing clients. You may need small tweaks in the process or let tools and software handle the invoicing task.

This simple yet effective invoicing practice can significantly enhance the invoicing process, uplifting your business efficiency and boosting the payment process.

8. Send an Invoice Via Email

No matter how quickly you make an invoice or which method you choose, prefer sending it online. Either you can send via email or directly on messaging apps like WhatsApp. For that, get software that can do both. Modern tools and software have made it possible to send an invoice to clients even if you are far away from your office. You can simply create an online invoice, review it once, and send it using email. Hence, you no longer need to bother clients for personal meetings.

Sending an invoice not only makes your invoicing job simple but also grabs the client’s attention, inspiring them to quickly process the payment.

9. Store Invoices on Cloud-based Software

Since you are making tremendous efforts to enhance your invoicing practices, how can you forget about invoice management? Managing and tracking invoices are also a part of the invoicing process and shouldn’t be overlooked. So, as soon as you make an invoice, store it on cloud-enabled software rather than just keeping paper-based copies in the archive boxes. This practice will greatly facilitate the invoice tracking process and make invoice management a breeze.

Invoices stored on the cloud storage means you can create financial statements, business reports, and even retrieve tax data in minutes. As a result, there is no need to gather invoice copies from different corners of the office.

10. Follow Up Timely

While many businesses follow up with clients via phone calls, setting up automated payment reminders can make a difference in your invoicing process. Sending automatic notifications will reduce the time required to remind the client about the payment due date. You can easily follow up without draining your time and encourage the client to make the payment at the earliest.

Automate Your Invoicing Process With Moon Invoice

A powerful invoicing software, Moon Invoice offers complete automation in invoicing with a seamless migration process. You don’t need training sessions to start making invoices as it is easy to use even by any non-technical person.

Get the customizable templates and enter the required details just like you were doing on paper-based invoices. The difference between a conventional process and Moon Invoice’s automated process is that an invoice would be more professional-looking and easier to read by your clients, reducing the chances of late payments.

Plus, as the icing on the cake, Moon Invoice also frees you up from manual intervention. The invoicing software makes payment tracking effortless so that you don’t need to collect every invoice and check the due date. Clients will automatically be notified once the due date has passed. This is one of the proven invoicing practices to keep up with your business operations, ensure timely payments, and fulfill profit goals.

Final Thoughts on Invoicing Best Practices

While the conventional invoicing methods are turning out ineffective for growth-oriented businesses, considering best invoicing practices is the need of the hour. Adopting modern and efficient invoicing practices will lessen your workload and significantly improve your payment collection process.

In case you have made up your mind to migrate to online invoicing, the Moon Invoice is the only sophisticated software you need. Moon Invoice has in-built invoice templates to create nice-looking invoices that get paid in a timely manner.

Apart from invoicing, Moon Invoice also brings in a wide range of features such as easy invoice tracking, expense management, receipt maker, and 20+ payment integrations. The reason why Moon Invoice can be your go-to software when it comes to adopting invoicing best practices. Try it out for free.

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