8 Best Practices for Invoicing Clients

Aug 18, 2023 by Zazil Martinez

For B2B businesses, efficient invoicing practices are essential. They impact the business's financial health and client relationships. But invoicing is more than just a routine process. It represents the backbone of cash flow and the basis for trust and transparency in every transaction.

How you handle invoices can affect how quickly and accurately you get paid. If you're not careful, a disorganized payment process can cause many problems, like late or missed payments. It might even lead to arguments about charges and lawsuits. To avoid these issues, make sure your payment process is well-organized and efficient. That way, you can reduce headaches and build trust in your finances.

To invoice a client effectively, create a clear and easy-to-understand invoice. Ensure they can see who they must pay, how to do it, and the total amount owed. Being transparent in your invoice builds trust and makes it hassle-free for clients to pay you. A detailed invoice facilitates a smooth payment process and improves the client experience, ensuring cordial financial interactions.

Take a look at these eight easy rules for invoicing your clients. They're designed to make the process simple and clear. By following these guidelines, you'll build a good relationship with your clients and make invoicing a breeze for everyone involved.


1. Call It an "Invoice"

An invoice has to have the word "invoice" on it. Some companies want to change the vocabulary because it feels too formal or needs to fit their company voice.

Unfortunately, not calling an invoice an invoice can lead to confusion, miscommunication, and missed payments. The best thing you can do is be as straightforward and transparent as possible. Call it an invoice, and ensure the client understands what it is and what is expected.


2. Identify Yourself

A good invoice clearly shows who is sending the invoice. Near the top, the invoice should include your name, address, contact details, and company registration number.

If you have a formal letterhead for your business, use it and make it prominent. If you do not have one, choose a larger or bolder font for your business name to make it obvious who sent the invoice.

You should also include contact information for your accounting department if they have any questions about the invoice.


3. Address the Client

The invoice should be addressed to the correct client and must include your client's name and address.

Finding the right person is commonly the first hurdle in sending invoices. If you continually have problems with a client making late payments on past invoices, double-check that you have the correct point of contact and information to get the invoice directly to them.


4. Include Invoice Information

Each invoice should have a separate tracking, account, or invoice number. This identification information should be clear.

An invoice number helps you better track which invoices have been paid in full and which are still outstanding. This makes managing the invoice process much smoother.


5. Clarify Dates

Dates help clarify when your invoice was sent out and when you expect payment. These dates are necessary for you to see invoice payments as soon as one day or as long as 90 days after the client receives the invoice.

Dates that should appear on your invoice include the following:

  • Invoice issue date
  • Payment due date
  • Delivery date

If you have established contracts with clients that offer them different payment schedule options, ensure the invoice's dates reflect what was specified in your contract. This can be difficult to juggle when you have multiple clients with different contracts, but that's where an automated invoice platform can be invaluable.


6. Specify Payment Terms and Options

You need to clearly state your preferred payment method and any available alternative payment methods. If you have a new payment portal, consider giving a quick step-by-step guide outlining how to make a payment.


7. Bold the Invoice Total

Clearly state the invoice total. It's best practice to bold the invoice total. Some companies make a separate box for the invoice total to avoid confusion.


8. Have a Detailed, Itemized List

You should always include an itemized list of product or service costs in the invoice. This list should answer any questions about the invoice price.

Common elements of this section of an invoice include:

  • Service or product
  • Quantity or hours
  • Rate or cost
  • Subtotal
  • Any sales, deals, or deductions
  • Applicable taxes
  • A finalized amount
  • Additional notes

Be generous with your additional notes. Notes help clarify the situation and can help you avoid any confusion or disputed charges.


Optimize Your Invoicing Process With Paystand

At Paystand, we're industry leaders in B2B Payments and know-how to invoice a client digitally. Read our ebook about the best practices of digital invoicing and find out how your company can deliver clear digital invoices that are easy to understand and help improve payment rates and cash flow.