Key Takeaways

• An invoice is a formal payment requesting document.
• An invoice serves as a legal record of the sale and can be used in legal actions.
• A professional invoice can be quickly created using the invoice template.
• An invoice should cover clear details such as the invoice number, client information, and seller details. 
• It not only helps in gaining on-time payment but also supports financial and tax reporting.

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, which include a payment link, to get paid on time without needing physical meetings.

Typically, an invoice is shared upon completion of the work or immediately after the product is delivered to notify the buyer about their pending dues. It serves as a payment request from the seller to the buyer.

Workflow of the Efficient Invoicing Process

Let’s understand the workflow of the invoicing process before looking at best practices for invoices. A smooth invoicing process is necessary for the company’s healthy cash flow. The overall process includes the following strategies:

Invoice Receiving:

Once the accounting team receives an invoice, they review the details and compare them with the purchase order. This approach aims to ensure that the right amount has been charged for the exact product or service that was ordered.

Invoice Approval:

In this phase, the accounting team manager reviews the invoice to ensure all the details are accurate. When every detail is accurate, the invoice is forwarded to the business owner for final approval.

Completing the Payment:

The accounting payable team then makes the payment for outstanding invoices once it gets approval. When making a payment, they must carefully review the payment terms and conditions and complete the payment accordingly. Later, they record the transaction for future reference. In case of early payment discounts, the team makes the payment quickly.

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 ways 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 manage, invoicing becomes tedious, making it difficult to handle bulk invoices. 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 invoice 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 needs to be clear and understandable at a glance and should not require back-and-forth. Since paper-based invoices neither meet any of the requirements nor are customizable, it’s better to go with customizable invoice templates. Selecting the right templates according to your business needs will enhance professionalism and eliminate the need to create an invoice from scratch. It is one of the best billing practices you must follow.

Businesses or freelancers can choose an invoice template that aligns with their industry and create beautiful invoices that attract payments faster. Plus, an invoice created using a template is unlikely to be misplaced, helping you keep an accurate record of your 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 amounts. 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 its clients to be disappointed because of inefficient billing practices. What’s better than getting reliable invoicing software for customer satisfaction? Modern tools and software help you avoid spending time on manual calculations, minimize potential human errors, and increase customer satisfaction. Hence, it’s no wonder that you need software to help you enter the correct invoice data and the due amount.

4. Provide a Unique Invoice Number

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

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

5. Write Clear Payment Terms

Always clearly state the payment terms in your invoice. It is another effective way to invoice. By implementing this practice, you can ensure that clients pay their dues on time. Highlighting the late fees along with the due date will inspire them to complete the payment as quickly as possible. Also, if you have written payment terms on an invoice, there will be no disputes regarding invoice payments. Ultimately, this practice will save you time, as you no longer need to chase payments or make phone calls.

When written on digital invoices rather than handwritten copies, payment terms are easy to read, helping clients understand how soon they need to clear the payment.

6. Allow Customers to Pay Conveniently 

The moment you create an invoice, it is intended to collect 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 customers can pay their dues with a single click. If needed, you can add their preferred accepted payment methods, such as Apple Pay, Stripe, Cash App, credit card, or debit card.

With online payment options, you can save both your time and the customer’s time because neither party needs to conduct physical meetings. Clients can pay the money online from anywhere, eliminating the need to carry cash. Additionally, you should offer multiple payment methods for the best payment experience. 

7. Review the Invoicing Process

One of the best billing practices is rechecking the invoicing process. Examining how you invoice clients regularly will help you discover any 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 for you. 

This simple yet effective invoicing practice can significantly enhance the invoicing process, improving your business efficiency and speeding up the payment process. 

8. Send an Invoice Via Email

No matter how quickly you create an invoice or which method you choose, you prefer to send it online. You can send it via email or directly through messaging apps like WhatsApp. For that, get software that can do both. Modern tools and software have made it possible to send invoices immediately to the clients, even if you’re far from your office. You can create an online invoice, review it, and then send it via email. Hence, you no longer need to bother clients for personal meetings.

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

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 is 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 mean you can create financial statements and 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 improve 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 wasting your time and encourage the client to make the payment as soon as possible.

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’s easy to use, even for non-technical people. Get the customizable templates and enter the required details, just like you would on paper-based invoices. The difference between a conventional process and Moon Invoice’s automated process is that invoices are more professional-looking and easier to read for 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. It is one of the proven invoicing practices to keep up with your business operations, ensure timely payments, and fulfill profit goals.

Moon Invoice commits to accuracy because it reduces manual data entry while enhancing automation. Overall, it improves the business’s cash flow.

Final Thoughts on Invoicing Best Practices

While conventional invoicing methods are proving ineffective for growth-oriented businesses, adopting the 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.

If you have made up your mind to migrate to online invoicing, the Moon Invoice is the only sophisticated software you need. Moon Invoice has built-in invoice templates to create professional-looking invoices that get paid on time. 

Apart from invoicing, Moon Invoice also offers a wide range of features, including easy invoice tracking, expense management, a receipt maker, and over 20 payment integrations. The reason is that Moon Invoice can be your go-to software for adopting best practices for invoicing. Try it out for free.

Frequently Asked Questions