Invoicing. You’re almost definitely familiar with the process and have received one yourself. They’re an unavoidable part of doing business and a crucial document in the sales process.
That being said, invoicing can be a time-consuming process, but it doesn’t have to be. The introduction of online invoice tools and invoice apps has made it possible to create invoices faster than ever before and to get paid faster than ever before.
As a small business owner, there are multiple hurdles you have to jump on a daily basis. Let’s not have invoicing be one of them. To make things easier, we’ve put together a handy article containing everything from the definition of an invoice to how to issue an online invoice.
Here’s what we’ll cover:
What is an invoice
What to include in an invoice
Why an invoice is important for your brand
How to issue invoices from anywhere, fast
The most efficient way to manage your invoices
Sure, you’ve heard the term thrown around and probably have a rough understanding of what an invoice is, but what’s the actual meaning of an invoice and why are they so important for businesses?
An invoice is what a business sends a customer after they’ve purchased its products or services. An invoice is given to a customer to not only ask for payment, but to also record that the exchange of products or services took place on a certain date. Why? This is for compliance reasons. We’ll go more into that below.
While they can feel like a bit of a hassle, invoices can be a business owner’s best friend. Why? Because they’re there as legal documents that prove a purchase took place, and they highlight that you’re owed money from a customer. They can even be used as evidence if for some reason further action needs to be taken on a customer avoiding invoice payment.
Invoices are basically there to get you paid quickly by notifying a customer, to help you keep track of your sales history and to give you legal backing should a situation arise.
Since an invoice is legally binding, it’s important that every invoice you send, whether online, via an app or on paper, contains specific information. What you need to include within your invoice does depend on where your business is located. Luckily, the UK has very clear guidelines on everything you’ll need to include:
A unique, sequential invoice number
The name and contact details of your business
Your customer’s name and contact information
The date the invoice was issued
A description of the products or service sold
The price of each product or service
The VAT (if applicable)
The total amount due
With all of this information available on your invoice, it’ll be considered a legal fiscal document. But an invoice can be so much more than just a sales agreement. It’s an important point of communication between you and your customer.
Sure, it may just seem like an everyday process, but like any touchpoint, an invoice, both online and written, is another opportunity to make your brand and business more memorable to a customer. It may even open a door to future sales and word-of-mouth recommendations.
That’s why it is generally a good idea to also include your logo and to include some kind of customisation in the design of your invoice.
If this isn’t something you’ve done or would consider doing, take a second to think about all of the invoices you’ve ever received. Many of them look exactly the same, don’t they? In fact, there’s a chance you can’t even remember what they looked like in the first place.
Use this as an opportunity to stand out from the crowd, and to ensure that every stage of a customers journey with you is enjoyable, even if it is when they’re paying the bill. It may seem like a small adjustment, but something as simple as a design template can make a world of difference.
Once your invoice numbers start climbing, you might find it becoming more difficult to stay on top of the status of each invoice without a very thorough filing system. Even working with invoices created in Word or Excel templates require different folders and you remembering to move them each time there’s a status change.
Each invoice goes through a series of activities: draft, completed, sent, viewed, unpaid, paid, and sometimes: overdue. This means sorting your invoices into the correct folders depending on where each invoice stands in the process.
How is it possible to know whether an invoice has been viewed? You might be thinking that the only way is if you hand the invoice over yourself and watch your customer read it. But if you send invoices online, good invoicing software tracks the email and notifies you when it’s been opened.
Invoicing software also automatically updates the status of your invoices, allowing you to effortlessly sort and track which invoice still needs to be sent, which needs a follow-up and more.
The invoicing process can also include more than just the completed invoice. Often, sales start with a quotation or a proforma invoice and delivery note. Sometimes, an invoice needs to be amended or cancelled and this involves a credit note. With invoicing software, all steps and documents that could be required in the sales process are just as easy to create as your invoice.
It’s no longer necessary to carry around an invoice template paper pad and pen, it’s not even necessary to sit at a computer working on creating and managing your businesses’s invoices for hours on end. Mobile apps and online invoicing tools now provide the technology to create the invoices you need, wherever and whenever you need them.
Nowadays, you can even create and issue an invoice via an app on your phone, and the technology has gotten so simple that you can send it out to a customer on the spot, or on the go.
Mobile and online invoicing options mean that you never have to worry about remembering to get to your invoices later that day, and prevents the possibility of invoices piling up to the point where you have to take care of too many all at once. After all, the faster you issue an invoice, the sooner you’ll get paid.
Automation in invoicing software has significantly decreased the amount of time needed to issue an invoice. By adding the option to save details on customers and products, all that is required to add these details to your invoice is a click or tap. But how to know what tool or service to use?
Finding the right invoice app or online tool can be tricky, some may offer features you’re interested in like customisation, while others may require less manual input from your side. There will be pros and cons.
The team at SumUp wanted to avoid this, so we created an Invoicing product that covers all the bases. SumUp Invoices allows you to create and customise professional invoices on the go in under a minute. The best part being you can get paid in just a few clicks.
You’ll get prompt payments from your customers and all you need to do is specify a due date and send it off. But it isn’t just a one-way street, by sending clear, error-free invoices, your customers get to use them for tax deduction and insurance purposes.
It’s crucial that you don't forget that your invoice needs to include certain information in order for it to be a viable, legal document. A lot of work goes hand-in-hand with invoicing. From customisation to keeping track of the invoices you issue, there are multiple things to take into account.
Consider easing some of the above burdens and reducing manual work by utilising an online invoice feature or invoice issuing app.
So, always remember:
An invoice benefits both you and your customer
Make sure you have all the necessary information on your invoice
Customisation is key
Stay on top of the invoices you send
There’s always an easier way