Invoicing dos and don'ts for small business

Invoicing is one of the main parts of business. Without invoices companies would not receive payment for their services. Because of how important invoices are it is a good idea to make sure that you stay on top of your invoices. But not only do you need to stay on top of your invoices, but you also need to remember a few dos and don'ts about invoicing for small business. Keep in mind that without invoices you can not pay your bills nor can you get paid by your customers.

Here are some invoicing dos and don'ts for small business.

Tip one:
Remember when creating an invoice you want to make sure it includes some key components. You will want to make sure that your invoice has an invoice date, an invoice number, an address of where to send the payment, a payment due date, a list of goods or services provided with their prices (include sales tax and shipping amounts if applicable), and you want to include a total amount due. All of these items should be clearly marked for your customer to read.

Tip two:
When you are sending out copies of an invoice be sure to include a copy for your records. You also want to make sure that you file a copy of the invoices in their proper place as soon as you have sent out the invoices. The reason for this is if you do not file the copies straight away you might end up double billing your customer which is something you don't want to do.

Tip three:
After you have sent out the invoice you need to devise a way to keep track of the invoice to be sure that it is paid. If you have accounting software you will be able to track the payments of invoices by entering in your cash receipts. You should also keep a copy of the cash receipts by hand, which means on paper and not stored in a computer. The reason for this is that computer systems can crash so it is always good to have a back up.

Tip four:
You will also need to set aside a few days a month to call your customers about past due invoices so that you can get paid. In order to get your money you might have to work out payment arrangements with your customers, but do not offer them anymore credit until they have caught up with their past due bill. This will help to ensure that your company is not going to lose money from bad debts and that you will be able to pay your bills when they come due.

Tip five:
You are going to want to have file folders for both your accounts receivable and your accounts payable. The best way to arrange the folders is in alphabetical order. If you have certain companies that you deal with on a regular basis and receive or hand out numerous invoices too you can give them their own folder.

Tip six:
The best thing to do with your accounts payable invoices is to track them in a file folder on a daily basis. Basically what you are going to need to do is to match the invoices as they come in with the purchase orders, so that you can account for the invoices. One thing that you do not want to do is to pay an invoice that is not accounted for. If you have any doubts about the validity of the invoice you should look into it further.

Tip seven:
Once you have paid the invoices you are going to want to mark them as paid so that you do not double pay your invoices.