8 Best Practices for Invoicing Clients

Feb 17, 2022 by Brandon Jones

Your invoice process can affect payment time and accuracy. A sloppy payment process can result in lots of headaches, including late and missed payments and even the potential for disputed charges and lawsuits.

The best way to invoice a client is with a transparent invoice. Clients should easily identify who they owe money, how to make the payment, and how much they owe.

Legally speaking, there are a few things every invoice must include if you want it to be considered an invoice. Check out these eight simple rules of how to invoice a client that make it legally binding and easy to understand.

1. Call It an “Invoice”

An invoice has to have the word “invoice” on it. Some companies want to change the vocabulary because they feel that it is too formal or doesn’t 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 make sure it is impossible for the client to misunderstand what it is and what is expected from them.

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 letterhead, choose a larger or bolder font for your business name to make it obvious who sent the invoice.

You may also want to 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 of 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 can help clarify when your invoice was sent out and when you expect payment. Without these dates, you could 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:

  • Invoice issue date
  • Payment due date
  • Delivery date

If you have established contracts with clients that offer them different payment schedule options, make sure the dates on the invoice reflect what was established 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, as well as 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 any confusion.

8. Have a Detailed, Itemized List

You should always include an itemized list clearly showing the cost of any products or services included in the invoice. This list should answer any questions about the invoice price.

Common elements of this section of an invoice include:

  • Service and/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 having any confusion or disputed charges.

Learn More with Paystand

At Paystand, we’re industry leaders in digital payment processing 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.