Sales invoicing is very important for a business, as is it a way to keep track of your transactions and request payments from clients. Once a sales invoice is issued to a customer, the invoice becomes a legally binding contract for a customer to pay. Sales invoices can present challenges for businesses, with late payments being common. The Business Disputes Register shares a UK statistic that 30% of invoices are not being paid within the agreed terms. This article will go through what a sales invoice is, giving you its key benefits, and how you can streamline and enhance your sales invoicing process to get paid faster and more efficiently.
A sales invoice is an accounting document that records business transactions, a record of the services that a business has provided to a client, and how much the client owes the business. The purpose of a sales invoice is the present the amount a client owes a business, creating an obligation for the client to pay.
Sales invoices are important for multiple reasons, such as providing accurate financial data, keeping your accounting organised, and effectively tracking your inventory. This section will go through the main reasons why sales invoices are important.]
Firstly, sales invoices help businesses keep track of their financial data. By creating sales invoices showing the transactions taking place in a business, you can better plan and manage your finances and know the revenues you are expecting.
QuickBooks shares a statistic that on average, businesses spend about 14 hours a week chasing outstanding payments. By incorporating a structured sales invoicing system, your business will have a better organisation with its accounting, reducing the amount of time you will be trying to get outstanding payments. This will increase your business’s efficiency when taking payments and free up time for other tasks to be completed.
Sales invoices can be very useful, as keeping a record of your income and expenses is important for tax purposes. You will be able to stay on top of your taxes, have proof of your revenues and see your tax payments through sales invoices.
Sales invoices will give a business useful insight into its inventory. By keeping track of the transactions that your business does with clients, you will also be able to effectively keep track of your inventory. This is because you will have records of the sales you are making, knowing how much of your stock is being sold to clients and how much you have left.
There are multiple steps that should be taken to create a winning sales invoice. This section will go through the steps so you can ensure that your sales invoice process is the best it can be.
When creating an invoice, you must make sure that you include your business’s details in the invoice. Details such as your logo, address, phone number and other contact details should be included.
Now that you have your details on the sales invoice, you must have the customer’s details on there too. Include customer details such as their contact details and their company details. This is the information of the person who will be paying your business. This information should be below your business’s details.
By including a number on your sales invoice, both you and the customer will be able to keep track of the document. As well as this, adding a date will help both parties understand the payment terms with when it is due.
In the main bulk of the text should be a list of the products or services that you have provided your customer with. Each item should appear on its own line with a description of the product or service, the unit price and the quantity that is provided.
The payment terms should be outlined in the sales invoice. This should state the payment methods that you will take, such as a card, cheque, or any other method you will accept. As well as this, any late fees you will charge on invoices should be included here.
Lastly, the total amount that is owed to the business from the client should be stated. This information needs to be clearly displayed for the client to see. The individual item costs should be detailed, as well as any applicable taxes, discounts, and prepayments. By following this structure, your business will be able to create good sales invoices to send to your clients and to keep for your database.
With an efficient sales invoice structure, it is likely you will be able to get paid from your clients faster, but there are other steps that can be taken to ensure that this happens.
Firstly, it is crucial that you send your sales invoice to the correct client with the correct details on it. You must ensure that details of how you would like to be paid are included on the invoice to make sure the payment can happen as fast as possible. If a mistake here were to happen in your business, it is likely your business will delay its revenue stream and possibly lose out on profits. A statistic by Sharespace highlights that 61% of late payments are due to incorrect invoices.
If you would like to get paid as soon as possible, you should consider sending your invoice through email. By sending your invoice through email, it will reach your client much faster than sending it through the post. As well as this, the risk of there being a mistake when sending an invoice is decreased when sending one through email. This is because if there is a mistake in the client’s email address, the sales invoice will ping back to the sender instantly. If there is a mistake with the address on a sales invoice being sent by post, it could take a much longer time to solve the issue.
The more payment options you offer your client the more likely a client will be able to pay the invoice faster. Giving them a wide range of payment options such as cash, card and cheque will allow them to be able to choose the method that is the most efficient for them. Whereas if you only provided one option, like cash, this could delay the payment if the client doesn’t usually pay with cash.
While nobody enjoys chasing after clients to get paid, on some occasions this will need to be done. If a client is late with a payment, you will need to send invoice reminders to the client to speed up the payment process. For example, you can send a personalised email to a client with a clear subject line to remind them to pay the invoice. The email should make it clear that it is about paying the invoice, while not being too threatening. Calls and texts are also alternate communication channels that can be used to remind a client about payment.
Sending out personalised invoices won’t just give your business better brand awareness, but it will also speed up the invoice process to get you paid faster. The way that this happens is with custom sales invoices, as you are able to increase the accessibility of the invoice for clients and sales representatives while using custom invoice books to make the process more efficient.
TEB is a sales-automating CRM software that can enhance your sales invoice processes by completely streamlining your quote and billing management. With TEB, your sales invoicing process will become much more efficient, with the management of client information and invoice templates being streamlined. The way TEB brings these benefits to your business is:
If you would like to learn more about TEB, and how it can transform your entire sales process, schedule a call with us here.
