Business Garage offers #toptips so you get the #bookkeeping basics right in our new weekly series. Week one – Invoicing
This week we tackle invoicing. Setting up a business is exciting, rewarding and stressful, often in equal measures. Without timely, clear and accurate invoicing, your cash flow will drop off and ultimately the business will fail. To avoid confusion and delays in receiving payments owed:
- Create a simple template that you can use each time, which clearly lays out a description of what the invoice is for, the amount owed, due date and your bank details.
- Keep the design clutter-free with easy to read text as many larger companies will scan the invoice, making blurred text or heavily coloured invoices harder to read later.
- Include the word ‘invoice’ (legally required) and invoice number, purchase order number if relevant.
- If your company is VAT registered, you must use VAT invoices, stating the VAT amount.
- Sole traders must also include your name and any business name being used, and an address where any legal documents can be delivered to you if you are using a business name.
- In the case of a limited company, you must include the full company name as it appears on the certificate of incorporation. If it’d decided to put names of your directors on your invoices, you must include the names of all directors.
- While you do not have to state payment terms, you should agree these up front and, in our opinion, always include these for clarity.
- You may also wish to include your logo to fit in with your branding. It looks more professional and makes you easier to remember.
- It is usually better to email a PDF invoice, rather than a postal invoice or a link to accountancy software. Follow up to ensure the invoice was received.
- Make sure you send the invoice to the correct person (agree this in advance) – often the purchaser of your product/service is not the person paying the invoices.
Business Garage have expert knowledge of a range of accountancy software including Sage and Xero. We can prepare and process invoices for you in a prompt and professional manner, freeing up your time for the important stuff – running your business! For expert guidance on any of these areas (and more!), contact Business Garage on [email protected] or 01235 433099.