Invoicing 101

After months, years, or maybe even decades of hard work, you have finally opened your own small business. Now it is time to start providing goods and services and receiving payment for them. You may have heard the word invoice thrown around when you were preparing to open your doors, but now the customers are at the counter and you need to have a firm understanding of the process. Welcome to invoicing 101.

Think of this document as an incredibly detailed itemized receipt, like one you might receive at a restaurant. Instead of a list of what you owe the establishment for your mozzarella sticks, shrimp carbonara, and sorbet, this is an intricate description of all the details a customer could ever want to know when it comes to paying their bill.

You should create a template, making it easy to fill out individual customers’ information. The template should include all applicable information about your business, including name, phone number, fax number, email, address, website, and any other information to help customers contact you with questions. If customers cannot easily find your contact information, they may refuse to pay what they owe, claiming you were not available to answer questions. Including this information in a prominent place on the invoice is an easy way to avoid confrontations with customers.

The template should also include a place for customer information. Record the date and their name, phone number, email address, and even physical address, when relevant. Keep a copy of the document for yourself and file it, making sure it can be located easily if you need to contact the individual about a late payment or with any clarifications about their bill.

Finally, your template should include a chart where you can record purchasing information. In general, the chart should include spaces for a description of each part or service, a manufacturing or item number when applicable, quantity of good or service, and price. Each of these should be filled out individually for each item purchased. Avoid presenting your customers with only a single price. Itemize the invoice so they can clearly see what they are paying for.

Finally, you must include the details of payment. Make it apparent on the document when you expect to be paid, in what form, and under what circumstances. Do not leave any ambiguity, as this can lead to delays in or absence of payment. Make sure to file your copy of every invoice you hand out. Armed with this knowledge, you are now ready to open for business.


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