What is an invoice?
An invoice (or bill) is simply a document used to ask the customer for money for a product or service that has been provided. However, invoicing must take account of customer experience, the requirements of the tax authorities, and your own business’s need to ensure that you get the money owed to you. Invoices at the same time form the basis for accounting. Any invoicing software should help with all of this.
What makes a good invoice?
A good invoice is easy to pay. A goof invoice makes it easy for the customer to check that the billing has been done correctly in all respects. A good invoice must of course meet the requirements of the tax authorities. These pages contains examples of well-made invoices, and a number of things that are important to keep in mind.
Here we have put together a list of tips for making invoices:
Create an invoice on the same day as the transaction was done. One week’s delay in creating the invoice will also delay the payment by a week. Another problem with delays in invoicing is that agreed-upon things might be forgotten. Timely invoicing gives the customer a professional impression of your company.
Draft the invoice in advance as an offer or a sales order at the earliest time possible. The invoicing itself – that is, producing the actual invoice and sending it to the customer – should not take more than a minute.
Be sure to send the invoice the way your customer prefers. As an electronic invoice if the customer prefers so, by email if it has been agreed on, or by conventional mail if you are unsure of the customer’s preference.
Before sending the invoice, double-check that the invoice meets the requirements of the tax authorities and that the name and other details are correct on the invoice. It is the responsibility of the customer not to pay any invoice that is incorrect in some detail or other.
Invoices need to be archived carefully. It is the responsibility of the company to save all accounting materials for a minimum of seven years. Electronic archiving is sufficient, as long as the documents have been saved in at least three different places.
Invoices must never be altered once they have been sent. If it turns out that there was a mistake in the invoice sent to the customer, it needs to be reimbursed and a new one made and sent in its place. If you need to modify a sent invoice be sure to notify your bookkeeper and customer.